FAQs For Companies

All defined terms are set out in the Glossary of Terms.

These FAQs are provided for informative purposes. They are not intended to provide advice of any kind (including legal, financial, tax or other professional advice). You should seek professional or specialist advice before doing anything on the basis of this content.

What is the company eligibility criteria for the Future Fund?

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

  1. 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);
  2. if the company is a member of a corporate group, it must be the ultimate parent company;
  3. the company does not have any of its shares or other securities listed/quoted on a regulated market, a multilateral trading facility, a recognised investment exchange and/or any other similar market, stock exchange or listing venue;
  4. the company must be a UK incorporated limited company;
  5. the company must have been incorporated on or before 31 December 2019; and
  6. at least one of the following must be true for the company:
  7. half or more employees are UK based; and
  8. half or more revenues are from UK sales.

Who can apply for the Future Fund? 

This is an investor-led scheme which means the Lead Investor applies on behalf of itself, the Investee Company and the Other Investors and provides information about the Investee Company and the Other Investors. Initial stages of the Application will be made by the Lead Investor, with the Investee Company subsequently providing and verifying information during the later stages of the Application. Information about the Lead Investor and the Other Investors is used by the portal to conduct certain checks on them, to compile execution versions of the legal documentation and to send those execution versions out to the Lead Investor and the Other Investors.

Are there restrictions for use of proceeds from the Loans?

Loans advanced under a CLA cannot be used to repay shareholder or related party loans (other than under any bank or venture debt facilities), pay dividends, pay bonuses or discretionary payments that are non-contracted or not in the ordinary course of business for 12 months, or pay advisory, placement or similar corporate finance type fees in relation to that CLA.

If I am a private equity backed business (for these purposes, not venture capital), am I eligible?

The Future Fund is open to all companies that meet the eligibility criteria.

What is a convertible loan?

A convertible loan is a debt instrument that may convert into shares of the company receiving the loan at a later date.

Will the Convertible Loan Agreement (CLA) be SEIS or EIS eligible?

HM Treasury and HMRC are responsible for all decisions on tax reliefs, including on SEIS and EIS.

It is our understanding that the structure of the CLA does not meet existing rules for SEIS or EIS eligibility. Compatibility with tax schemes is a matter for HM Treasury and HMRC.

 Will entering into the CLA affect the SEIS or EIS compatibility of investments made prior to the CLA?

HM Treasury and HMRC are responsible for all decisions on tax reliefs, including on SEIS and EIS.

The government has confirmed that such previous investments will not be affected where the convertible loan converts into shares. Where the convertible loan note redeems, we have been alerted that the government intends to make changes to the rules to clarify that this is compatible with such previous investments.

Will entering into the CLA affect the SEIS or EIS compatibility of future investments?

HM Treasury and HMRC are responsible for all decisions on tax reliefs, including on SEIS and EIS.

What happens if I don’t have an external investor or investors lined up?

The Future Fund provides matched funding and therefore will require third party investor(s) for an application to be made. The Future Fund does not offer a ‘matchmaking’ service where companies can find investors on the portal.

Investors are strongly recommended to confirm the commitment of any other investors investing alongside them before submitting an application for an Investee Company.

Will the fund be split into sub-funds for different sizes of investment?

No. Applications will be processed on a “first come, first served” basis. The fund will not be split into sub-funds for different sizes of investment.

Will I be more successful if I ask for less money, will my allocation be scaled back?

No. Applications will be processed on a “first come, first served” basis. The application process does not make any distinction on the size of investment.

When do I have to have previously raised £250,000 external equity funding by?

An Investee Company must have closed at least £250,000 of equity investment for cash consideration from third-party investors in the period 1 April 2015 to 19 April 2020 inclusive. Any application will be subject to the eligibility criteria.

Will I be eligible if I haven’t previously received £250,000 in third party equity investment?

No. The Investee 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).

Are sole traders / freelancers eligible?

No. To be eligible a business must be a UK incorporated private company limited by shares. Sole traders, partnerships, LLPs and unincorporated bodies are not eligible, nor are companies whose shares are traded on public exchanges.

How long does it take to fill in the initial part of the Application?

Completion of the initial part of the Application should not take a long time, but will require the Lead Investor to have certain information to hand – this information is set out at the start of the Application process.

If a company has received other types of Government aid related to COVID-19 can they still apply to the Future Fund?

Yes. Companies that have received other types of Government aid related to COVID-19 are not excluded from applying to the Future Fund.

What happens if the eligibility criteria are not met?

If the eligibility criteria are not met, your Application will not be able to proceed.

What other Government Support is in place for businesses struggling in the face of COVID19?

Please visit https://www.gov.uk/coronavirus for more information.

Do AIM quoted companies qualify as under tax guidance they are unlisted and unquoted?

No. AIM quoted companies will not qualify, nor will companies with shares admitted to trading on any other similar market, stock exchange or listing venue.

Will companies incorporated in Scotland, Wales or Northern Ireland also be able access this funding?

The Future Fund is open to eligible companies incorporated in England and Wales, Scotland or Northern Ireland.

What sectors can access the Future Fund?

The Future Fund is open to eligible companies operating in all sectors.

What is the timeframe for investment under the Future Fund?

The Future Fund will launch in May 2020 and will initially be open until the end of September 2020.

Won’t this crowd out private investment / distort the market?

This is a temporary and targeted programme to address funding challenges arising from the Coronavirus pandemic.

Does the Government expect to make a return?

The Future Fund will operate on a fully commercial basis, on the same terms as third-party investors.

Will angel investors who have invested in start-ups qualify?

Yes, subject to meeting the eligibility criteria for the Future Fund.

Can directors’ and employees’ investment to date count towards the £250,000 / can they also count as matched funders to the Future Fund?

No. The Investee 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). Third-party investors means investors other than any founder, employee, worker or consultant or their connected parties.  However, investment from non-executive and investment directors can count towards the £250,000 raised, and will be eligible for match funding.

If an application is successful a director of the Investee Company will be required to sign a standard form declaration which includes, among other things, a confirmation of this criterion.

Can the £250,000 previous third-party investment requirement include shares transferred (instead of new shares issued) e.g. secondary purchase of shares as opposed to buying new shares?

No.  Only new shares issued by the Investee Company, and subscribed for by third party investors, will count towards this eligibility criterion – share transfers will not be relevant to this criterion.

How does the interest rate work?

The rate of interest applicable will be no less than 8% (non-compounding), but may be higher for all Investors (including the Future Fund) if that has been agreed between the Investee Company and Investors (other than the Future Fund) prior to the Application.

When is the interest payable?

The interest is only charged on conversion of a Loan into shares or an event of default by the Investee Company. Companies may elect to repay interest prior to conversion.

What is the conversion discount rate?

The conversion discount will be 20%, unless a higher rate has been agreed with the Investee Company and the Investors (other than the Future Fund). Please refer to CLA for further details.

What is a valuation cap?

Please refer to the Glossary of Terms.

When can the Loans convert into equity?

The Loans can convert into shares in the Investee Company in a variety of circumstances, including fundraisings, exit events and upon the maturity of the Loans. Please note that, Loans may alternatively be repaid on an exit event or at their maturity date either at the election of Investors or, in certain cases, automatically.

When will the Loans mature?

The Loans will mature 36 months after the execution date of the CLA.

Can an Investee Company repay the Loans if it chooses?

The Investee Company cannot choose to repay its Loan. The Loans will either convert into shares or be repayable in certain circumstances, such as: specific exit events; maturity of the Loan; or on an event of default by the Investee Company.

Will the Future Fund require management information?

Yes, the Future Fund requires Investee Companies to provide the same information that current shareholders receive. Additionally, the Future Fund will require information to be submitted quarterly via an online portal for portfolio monitoring purposes.

Is there a currency requirement for the investment funds?

All investment funds need to be in pounds sterling.

Are any terms of the CLA negotiable?

The form of the CLA is a fixed, standard form document. However, certain terms of the CLA, including the interest rate, conversion discount, headroom amount and valuation cap are negotiable between the Investors (other than the Future Fund) and the Investee Company in advance of Application. However, the interest and discount rates cannot be lower than 8% and 20% respectively. If no headroom amount or valuation cap is agreed, they will default to zero and void, respectively.

What is meant by “substantive economic presence” in the UK?

At least one of the following must be true for the Investee Company:

  • half or more employees are UK based; or
  • half or more revenues are from UK sales.

Will I be eligible where part of this round has been left open for investors who are yet to be identified?

Once the CLA has been signed, there is a 90 day window in which additional investors can make further loans to the Investee Company on the same basis as the CLA, up to a headroom amount agreed in the CLA by the Investors and the Investee Company. These further loans will have to be arranged between the relevant Investee Company and further investors outside of the portal and the relevant Investee Company will notify the Future Fund of the outcome. These additional loans do not qualify for matched funding from the Future Fund.

How do the Loans rank with existing debts of the Investee Company?

The Loans shall rank pari passu with all other unsecured indebtedness or obligations of the Investee Company and shall be subordinated to any secured debt of the Investee Company.

How does this rank with existing ASA’s and would they qualify as a match?

Existing ASA’s do not qualify as matched funding for the purposes of the Future Fund, nor do they qualify as equity raised until they have converted into shares.

In the scenario where the Loans convert, which government entity would be on the Relevant Investee Company’s cap tables?

UK FF Nominees Limited. This entity holds legal title to the Future Fund’s Loans and any shares resulting from their conversion on behalf of the government.

How will the Future Fund ensure that funding decisions are fair and that it supports a broad range of companies?

The Future Fund allocates funding by applying a set of standardised eligibility criteria. These criteria are published on the website. They have been developed to allow for a broad range of companies to benefit from the Future Fund, while protecting taxpayer investment.

How will the Future Fund ensure that funding is distributed to companies across the UK?

The Future Fund is open to companies in all regions and countries of the UK. Applications from potential investors will be assessed and allocated funding on a first-come-first served basis, subject to meeting the eligibility criteria. Controls are in place to reduce privileged access by more advanced potential investors submitting Applications in respect of a large number of companies on the same day.

Why are you collecting information on diversity as part of the Application process? What will you do with this data?

The Future Fund is collecting data on the diversity of companies to enable us to monitor the diversity of the Applications we receive. The Application asks for the gender mix and ethnicity mix of the management team and the region where the company is based. Providing gender mix and ethnicity mix data information is optional (region is given by the company address).

The Future Fund and British Business Bank will anonymise and aggregate this data and plan to publish it to contribute to increased transparency of the investment markets.

View our privacy notice here.

 Why are you asking investors to sign the Investing in Women Code?

The Future Fund has signed the Investing in Women Code and is encouraging other investors to sign because we strongly believe in the value of diverse teams and their importance in business.

The Investing in Women Code is a voluntary commitment to support the advancement of female entrepreneurship in the UK by improving female entrepreneurs’ access to tools, resources and finance from the financial services sector.

The Code requires signatories to take steps to ensure senior responsibility and data transparency and that they adopt appropriate internal practices.

Investors can read further information and sign the Code here.

Does the Future Fund have any targets or goals related to diversity and inclusion?

The Future Fund does not have any specific diversity and inclusion targets but it is open to a broad range of matched funders across the UK to achieve as diverse a distribution of the funds as possible within the parameters of a scheme based on simple eligibility criteria.

  • The Future Fund will record the gender mix and ethnicity mix of the senior team of each company at the point of application and the region in which they are based, and publish these as anonymised, aggregated statistics.
  • The Future Fund has signed HM Treasury’s Investing in Women Code which is designed for all organisations that finance entrepreneurs. The Code commits organisations to advancing female entrepreneurship.
  • The Future Fund will also encourage matched funders to sign the Investing in Women Code, in order to support diversity in the equity ecosystem. The list of signatories to the Code is held by HM Treasury and is available here.

Will diversity statistics for the Future Fund be published? If so, when will these statistics be available?

The Future Fund and British Business Bank plan to publish anonymised and aggregated diversity statistics to contribute to increased transparency of the investment markets. These statistics will be published once a sufficient number of applications have been made to Future Fund for data to be meaningful.

View our privacy notice here.

Will the CLA have tax consequences for the Investee Company, the Lead Investor and/or any Other Investor?

Entering into the CLA and/or undertaking any of the actions contemplated by it may have tax consequences for the Investee Company and/or any of the Lead Investor or the Other Investors, some of which could potentially be adverse. We would strongly recommend that the Investee Company and each Lead Investor and Other Investor seeks its own tax advice prior to entering into the CLA and/or undertaking any of the actions contemplated by it.

Will the CLA have accounting consequences for the Investee Company and/or the Lead Investor or any Other Investor?

Entering into the CLA and/or undertaking any of the actions contemplated by it will have complex accounting consequences for the Investee Company and each of the Lead Investor and the Other Investors. We would strongly recommend that the Investee Company and each Lead Investor and Other Investor seek accounting advice prior to entering into the CLA and/or undertaking any of the actions contemplated by it.

How do I start an Application?

A Lead Investor must initiate an Application in respect of the relevant Investee Company. An Investee Company (i.e. a company seeking investment) cannot initiate an Application. Once a Lead Investor has submitted an Application, you will receive an email with instructions on how to (i) proceed with opening an online account; and (ii) progress the Application.

You can check your company’s potential eligibility for the Future Fund on the Companies page of the Future Fund website.

Can an Investee Company have more than one Application?

No, only one Application per Investee Company can be accepted. A Lead Investor must initiate an Application on behalf of all the Investors (other than the Future Fund) that would propose to participate in the funding. Matched funding must be evidenced in full for the Application to be processed.

What information does a Company need to submit once an Investor has made an application relating to them?

To submit the application you must be a statutory director or company secretary of the company.

You will need the following information to set up a Future Fund portal account:

  • name;
  • job title;
  • email address;
  • password; and
  • telephone number.

We will ask you to review and add or amend the following information on the Investee Company:

  • Investee Company name;
  • legal form;
  • date of incorporation;
  • country of incorporation;
  • UK Company registration number;
  • registered address;
  • operating/trading address (if different);
  • number of full time equivalent employees (this year/last year/two years ago – as applicable);
  • turnover (this year/last year/two years ago – as applicable);
  • website address (if applicable);
  • industry (SIC Code);and
  • nature of Investee Company.

You will need the following information on each company officer and ultimate beneficial owner:

  • whether they are a key principal/director or an ultimate beneficial owner;
  • name;
  • date of birth;
  • citizenship; and
  • copy of an ownership structure chart or supporting documentation showing all ultimate beneficial owners owning 25% or more of the company as well as all intermediary beneficial owners.

We will ask you to for the following information on the diversity mix of your management team – you may choose not to provide this information but we encourage you to do so:

  • gender mix of management team; and
  • ethnicity mix of management team.

You will need the following information on yourself:

  • name;
  • date of birth;
  • country of birth;
  • citizenship;
  • address; and
  • image or scanned copy of a photo ID (driving licence, passport, identity card).

You will need to confirm the following information provided by the Lead Investor on the Investment:

  • amount of the loan provided in aggregate by private investors;
  • amount of the loan requested from Future Fund;
  • amount of the loan provided by the Lead Investor (as the Lead Investor of the group); and
  • whether the Investor had previously invested in the Investee Company (yes/no).

You will need the following information on your nominated company solicitor:

  • name of firm of solicitors;
  • name of primary contact at firm;
  • email address of primary contact at firm;
  • telephone number of primary contact at firm (if applicable);
  • Solicitor registration location (e.g. England and Wales); and
  • Solicitor registration number of firm.

Once an Application is submitted, we will perform checks and may request further evidence.

What is the role of the Investee Company’s solicitor?

The distribution of funds for successful applications will be handled through nominated company solicitors. It is your responsibility to appoint solicitors with the necessary rights to practice and handle client monies. You can consult the public registers of the relevant regulatory bodies in the UK to check your solicitor has the right to practice. You may also wish to instruct a company solicitor to advise on the scheme, your eligibility under the scheme and the associated documents.

How do I view open Applications?

You can view all open Applications by logging into your Future Fund online account, and clicking on the ‘View open applications’ button. Here you can see the status of the Application.

How do I sign into my account?

You can sign into your account by clicking on the profile icon on our website (top right-hand corner).

I’ve forgotten my password. What do I do?

There is a ‘Reset password’ button on the sign in page. Navigate to the sign in page and follow the instructions on screen.

How do I change my personal account information?

You can edit your profile information by clicking on the ‘Edit profile’ button when you have signed into your account.

Can I use the portal to find suitable investors?

No, the portal does not allow for ‘match-making’. Your company must have matched with an investor (or investors) before the Lead Investor submits an Application.

I realise I’ve submitted inaccurate information in my Application. What do I do?

Contact our customer support team as soon as possible. Contact details are on the Support page.

The pre-populated information in the Application is inaccurate. What do I do?

Continue with your Application and submit the Application. Then contact our customer support team as soon as possible. Contact details are on the Support page.

I know that an investor has submitted an application in connection with my company, but I haven’t received an email. What do I do?

Contact our customer support team as soon as possible. Contact details are on the Support page.

I’ve submitted an Application. What happens next?

Applications are expected to take a minimum of 21 days from initial application to funding being awarded. The difference between application timelines will depend on a number of factors including the speed at which applicants are able to provide information and review documentation. The immediate next step is as follows:

Process application

We will conduct a number of checks on the proposed Investor(s) and Company (including KYC and AML checks) and review the Application.

You should have received an email with more information about what happens next in the process.

How much will legal advice cost to support this Application process?

There is no application fee for the Future Fund or standard rate for solicitor services.

When selecting a solicitor, please ensure you understand what the role of the solicitor will involve (please refer to the FAQ “What is the role of the Investee Company’s solicitor?” for further guidance).

When choosing a solicitor, it is important that you seek clarity on the Solicitor’s charging/fee structure, that this is transparent; and that you understand the work and services required. Many solicitors across the UK will be able to help you so it is always advisable to consider the options in terms of which solicitor to engage.

What are the Future Fund terms and conditions?

The Future Fund terms and conditions can be found here. If your application is successful, you will be entering into a CLA. The terms and condition of the CLA can be found on the Solicitors page of the Future Fund website.

Who is UK FF Nominees Limited?

UK FF Nominees Limited is the entity that enters into Convertible Loan Agreements on behalf of the Future Fund. UK FF Nominees Limited is the legal titleholder to the Future Fund’s Loans and any shares resulting from their conversion. It holds beneficial interest in the Loans (and any shares resulting from their conversion) on bare trust for the benefit of the Secretary of State for Business, Energy and Industrial Strategy.

How do I log a complaint?

You can log a complaint by (1) completing the online enquiry form, (2) emailing our support team, or (3) phoning our support team. Contact details can be found on the support page of the Future Fund website.

Can I speak to someone?

If you have a general query about how to access the scheme please contact us on 03307260230 or email FutureFundSupport@british-business-bank.co.uk. If you want specific advice such as legal, tax or investment advice please speak to an appropriately qualified professional.