Future Fund

Scheme overview

Announced by the Chancellor on 20 April, the Future Fund issues convertible loans to innovative UK companies with good potential, that typically rely on equity investment and are currently affected by Covid-19. The scheme, will help these companies through the current period of economic disruption and the recovery, so they are able to continue their growth trajectory and reach their full economic potential. The scheme is designed by government and delivered by the British Business Bank

The Government has made £250 million available for the Future Fund, and will keep this amount under review. The scheme is open for applications until the end of September 2020.

Using the buttons below, select the option most relevant to you.

How it works

Investor applies:

  • The investor, or lead investor of a group of investors, certifies they meet the scheme eligibility criteria and provides key investment details.

Visit the Future Fund portal

Company confirms:

  • The company confirms the accuracy of the investment application details provided, before submitting the full application.

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.

Key features of the scheme

Investor-led processMatched fundingLoan sizeUse of proceeds
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.

Companies are still able to register their interest - see the Company page for information.
The Future Fund will match up to 100% of the amount provided by investor(s), up to a maximum of £5 million. The Future Fund loan amount provided to the company ranges from £125,000 to £5 million.

Amounts of Future Fund loans must be at least matched by co-investment from investors.
Funding must not be used to (a) repay any borrowings;(b) pay any dividends; (c) pay any bonuses; (d) pay any advisory fees.

Interest rateTermConversionStandardised terms
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. 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.
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.

eligibility Criteria

In order to be eligible for the scheme, each of the investor(s) and the company must meet specific criteria.

The investor must fall within any of the following categories:

  • an “investment professional” within the meaning given to that term in article 19 of the FPO
  • a high net worth company, unincorporated associated or high value trust falling within article 49(2) of the FPO
  • a “certified sophisticated investor” or a “self-certified sophisticated investor” within the meaning given in articles 50 and 50A respectively of the FPO
  • a “certified high net worth individual” within the meaning of article 48 of the FPO
  • an equivalent professional, high-net worth, institutional or sophisticated investor in accordance with applicable law and regulation in such investor’s home jurisdiction
  • an association of high net-worth or sophisticated investors within the meaning of article 51 of the FPO
  • capable of being classified as a “professional client” within the meaning given in the glossary to the FCA Rules

Note that all other investors must fall within one of the above categories in order for them to be eligible to invest in the convertible loan agreement. It is the responsibility of other investors to ensure they are eligible.

“FCA Rules” means the FCA’s handbook of rules and guidance
“FPO” means the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005

To be eligible for the scheme, the company must meet the following criteria:

  • 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)
  • If the company is a member of a corporate group, it must be the ultimate parent company
  • 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
  • The company must be a UK incorporated limited company
  • The company must have been incorporated on or before 31 December 2019
  • At least one of the following must be true for the company:
    • Half or more employees are UK based
    • Half or more revenues are from UK sales

Investors and companies should note that the proceeds of the convertible loan agreement must not be used by the company to:

  • Repay any borrowings from a shareholder or a shareholder related party (other than the repayment of any borrowings pursuant to any bank or venture debt facilities);
  • Pay any dividends or other distributions;
  • For a period of twelve months from the date of the relevant convertible loan agreement, make any bonus or other discretionary payment to any employee, consultant or director of the company other than as contracted prior to the date hereof and as paid by the company in the ordinary course of business; or
  • Pay any advisory or placement fees or bonuses to any corporate finance entity or investment bank or similar service provider on monies advanced by the Future Fund.

Access to investment

Tracking diversity and inclusion

The application form asks a number of questions on diversity and inclusion to help us monitor the diversity of the portfolio of loans backed by the Future Fund scheme.

Investing in Women Code

The Future Fund is a signatory to HM Treasury’s Investing in Women Code. We encourage Angel Syndicates, Venture Capital firms and Banks to also sign the code here.

Right to change application process and eligibility and allocation criteria

The Future Fund retains its right to alter the application process, eligibility criteria and allocation criteria at any time, with details of any such changes posted on this website.

Information we capture

As part of the application process, we will collect information about the investors, the companies and companies’ nominated solicitors. We will also collect some personal information about key individuals. We will use the information we collect to monitor the allocation of funds by the Future Fund and ensure that funds are allocated to eligible companies. We reserve the right to share all data for research purposes with other Government departments and agencies acting on our behalf. Data and documents provided will be used for KYC / AML and general fraud checks as part of the full application.

See our privacy notice for further details on how we look after and use your personal data.

Other business finance support

Government Business Support website
Guidance on Government measures to support public services, people and businesses through this disruption.

Coronavirus Business Interruption Loan Scheme (CBILS) for smaller businesses
Guidance on how smaller businesses can apply for CBILS funding.

Coronavirus Large Business Interruption Loan Scheme (CLBILS)
Guidance on how larger businesses can apply for CLBILS funding.

Bounce Bank Loan Scheme (BBLS)
Guidance on how small and micro businesses, in all sectors, can access the BBLS scheme.