Announced by the Chancellor on 20th April 2020, 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.
Initially, the Government made £250 million available for investment through the scheme, to be matched by private investors, with the Treasury making clear the amount could be increased if needed. Due to the popularity of the fund, more funding is being made available. The scale of the scheme will be kept under review.
Scheme update – 24th September 2020:
The Government has announced an extension to the Future Fund. The Future Fund will now close for new applications on Monday 30th November 2020.
Scheme update – 30th June 2020:
Since the scheme launched in May 2020, its eligibility criteria has been amended to include innovative companies that participate in accelerator programmes based outside the UK.
Where before, these companies didn’t qualify because they had to register in an overseas jurisdiction to take part in an accelerator programme, the new criteria means they can now access the fund, providing they meet all other conditions for eligibility.
If you have submitted an application and received confirmation of eligibility, your application is currently being reviewed and processed. If we require additional information or clarification on any aspect of your application, our Future Fund Support Team will be in touch with you directly. Thank you.
Using the buttons below, select the option most relevant to you.
How it works
- The investor, or lead investor of a group of investors, certifies they meet the scheme eligibility criteria and provides key investment details.
- 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 process||Matched funding||Loan size||Use 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 "Information for companies" page.
|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 rate||Term||Conversion||Standardised 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 company cannot repay the loan early 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.|
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: all other investors must fall within one of the above categories 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
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 or be eligible to apply as a non-UK parent company (see specific eligibility criteria in the FAQs for non-UK parent companies).
- The company must have been incorporated on or before 31 December 2019 (or if you are a non-UK jurisdiction company, this criterion applies only to at least one UK subsidiary operating company).
- At least one of the following must be true for the company (this criterion applies to your group): (i) half or more employees are UK-based; (ii) half or more revenues are from UK sales.
If you are applying as a non-UK jurisdiction parent company, the company must also meet the following criteria:
- The company must have participated in an accelerator programme, on or before 19 April 2020, and participation in the accelerator mandated incorporation of the ultimate parent company in a non-UK jurisdiction (see the definition of “accelerator programme” in the FAQs for non-UK parent companies).
- The company must have received investment from the accelerator programme on or before 19 April 2020.
- The company must be the ultimate parent company of a group which contains at least one subsidiary operating company incorporated in the UK on or before 31 December 2019.
- If the group (or any entity within the group) was in existence before the company was incorporated, the ultimate parent company of the group (or the sole entity, if applicable) must have been incorporated in the UK.
Note: for non-UK companies, to protect the use of public funds, all applications will be assessed against UK Government investment standards on specific jurisdictions by reference to factors such as sanctions, tax transparency, and the cost and complexity of implementation.
The UK Government will also take into account concerns around the proper use of public finances and wider public policy risks, as well as whether investment would undermine the integrity or public credibility of the Future Fund. Once we have assessed the eligibility of the non-UK company and the compatibility of its jurisdiction of incorporation and corporate form with the scheme, we will be in touch.
Investors and companies should note that the company must not use the proceeds of the convertible loan agreement 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 12 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.
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 the disruption of COVID-19.
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.