Rishi Sunak announced a £1.25 billion coronavirus package to protect firms driving innovation in the UK, and we have been keeping a close eye on developments as this package of measures unfolds in order to keep our clients in this vital part of the economy informed.
In essence, assistance will be available from May, and falls within the following categories:
Future Fund – £500million
It is a fund set up to provide match funding to private investors in form of convertible loan notes and would be helpful where a member or members of a syndicated investment have chosen to withdraw in light of the Covid-19 situation.
To be eligible, the business must have raised £250,000 over the past five years. The fund is set up to provide match funding of between £125,000 – £5 million. The scheme application process is being designed by British Business Bank and they aim to start taking applications in the first week of May.
More details of this fund can be found here.
Innovate UK – £750million
Innovate UK will receive the above funding package to assist SME businesses in the innovation sector and is intended to address smaller businesses who would not be eligible for the Future Fund.
£200 million of this package is earmarked to support existing Innovate Grant Holders. We are informed that Innovate advisers will be in contact with all existing customers within next few days and that the funding assistance will include three-month automatic extensions, and bringing forward existing grant awards to support businesses rather than pay them quarterly in arrears.
£300 million in Continuity Grants and Loans – (split approx. 50:50). The “Tech CIBL” – this is being made available to businesses in the innovation sector which were on track pre COVID but want to continue to innovate through this period.
£210 million is being made available to firms who wish to continue to innovate through COVID-19 crisis. We understand that it applies to UK based businesses of any size, any sector including those that wish to pivot their business and need to invest in innovation to achieve this. We are informed that Innovate plans to start releasing competitions via their website (Funding Opportunities) with a less than one-month turnaround.
The maximum grant size is £175,000 (due to de minimis state aid rules).
Grants of up to £50,000 will be paid upfront, larger grants will be paid 50 per cent upfront, with no match funding required.
More details of this funding can be found here.
Start Up Funding Club
It was announced yesterday that Innovate have received an additional £10million from British Business Bank to support seed, EIS/SEIS, business angel investments.
More details of this Club can be found here.
Should you have any questions please do not hesitate to contact us and in the meantime my best wishes to you in these strange times.
Susannah Adams, Corporate Finance Partner.