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RE: COVID-19 support measures. Future Fund

Updated: Jan 27, 2022

7 January 2020

The Government has announced an extension to the Future Fund. The Future Fund will now close for new applications on Sunday, 31 January 2021.

We are providing the key points of the scheme below:

What is the essence of the support?

The Future Fund provides government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least an equivalent funding from private investors. These convertible loans are a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme. The scheme is delivered in partnership with the British Business Bank.

The application process is investor-led. This means an investor, or lead investor of a group of investors, applies in connection with an eligible company.

Eligibility criteria

  1. The company must be a UK incorporated limited company.

  2. The company must have been incorporated on or before 31 December 2019.

  3. The company must have raised at least £250,000 in equity from third-party investors in previous funding rounds in the last five years (from 1 April 2015 to 19 April 2020, inclusive).

  4. If the company is a member of a corporate group, it must be the ultimate parent company.

  5. The company does not have any of its shares or other securities listed on a regulated market, a multilateral trading facility, a recognised investment exchange and/or any other similar market, stock exchange or listing venue.

  6. At least one of the following must be true for the company (this criterion applies to your group):

  • half or more employees are UK based; and

  • half or more revenues are from UK sales

How it works?

1) Investor’s application. The investor, or lead investor of a group of investors, certifies they meet the scheme eligibility criteria and provides key investment details.

2) Company’s confirmation. The company confirms the accuracy of the investment application details provided, before submitting the full application.

3) Contract is finalised. In the case of approved applications, all parties will execute an agreement (in the template form provided) and satisfy certain conditions set out in the agreement before the funds are released.

The deadline

The Government has announced an extension to the Future Fund. The Future Fund will now close for new applications on Sunday, 31 January 2021.

Financial terms

1) The loan will mature after 36 months.The loan cannot be repaid early by the company other than with the agreement of all of the investors.

2) The loans will have a minimum of 8% per annum (non-compounding) interest charge applied. This interest will be higher if the company and the investor(s) agree between themselves. Unlike a typical bank loan, the interest is not payable on a monthly basis and instead will accrue until the loan converts. At this point, the interest will either be repaid or convert in equity.

3) The loans will convert into shares in the company in certain circumstances, including an exit or a new funding round.Investors and the Future Fund both invest using a convertible loan agreement, which is predefined and cannot be negotiated.

We do not have all the information about potential investors, so we cannot say unequivocally if your company meets the criteria. However if you plan to use the scheme, then we will be happy to help you in preparing the necessary information or documents.

For further information on any of the points above contact

Mikita Makayou at, or

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