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UK businesses driving innovation and development will be helped through the coronavirus outbreak with a £1.25 billion government support package, the Chancellor announced today.
The Chancellor Rishi Sunak has announced a new £1.25 billion coronavirus package to protect firms driving innovation in UK. The package includes a £500 million investment fund for high-growth companies impacted by the crisis, made up of funding from government and the private sector
SMEs focusing on research and development will also benefit from £750 million of grants and loans
UK businesses driving innovation and development will be helped through the coronavirus outbreak with a £1.25 billion government support package.
The Chancellor has said that the targeted and tailored help would ensure firms in some of the most dynamic sectors of the UK economy – ranging from tech to life sciences – are protected through the crisis so they can continue to develop innovative new products and help power UK growth.
The comprehensive package includes a new £500 million loan scheme for high-growth firms, called the Future Fund, and £750 million of targeted support for small and medium sized businesses focusing on research and development.
Chancellor of the Exchequer Rishi Sunak, said:
“Britain is a global leader when it comes to innovation. Our start-ups and businesses driving research and development are one of our great economic strengths, and will help power our growth out of the coronavirus crisis.
This new, world-leading fund will mean they can access the capital they need at this difficult time, ensuring dynamic, fast-growing firms across all sectors will be able to continue to create new ideas and spread prosperity.”
Delivered in partnership with the British Business Bank and launching in May, the fund will provide UK-based companies with between £125,000 and £5 million from the government, with private investors at least matching the government commitment. These loans will automatically convert into equity on the company’s next qualifying funding round, or at the end of the loan if they are not repaid. To be eligible, a business must be an unlisted UK registered company that has previously raised at least £250,000 in equity investment from third party investors in the last five years.
The government is committing an initial £250 million in funding towards the scheme, which will initially be open until the end of September. The scale of the fund will be kept under review.
Commenting on the UK Government unveiling financial support for start-ups affected by Covid-19, Dr Liz Cameron OBE, Chief Executive of the Scottish Chambers of Commerce, said:
“The entrepreneurial pedigree of Scotland and the UK’s start up community has helped build up a world-renowned international reputation for creativity and innovation.
“There were gaps in the current major support measures that meant that these newer companies were not able to access the existing Covid-19 business support schemes. This new package will enable these fast-growing and dynamic businesses to continue trading with more ease of mind, at the very forefront of our most cutting-edge sectors and technologies.
“The most important thing now for firms is ease and speed of access to this support. This funding must be made available as soon as possible, with as few administrative hurdles as possible, in order to safeguard against the potential of firms folding in the time it takes for this support to be accessible.’’
The £750 million of targeted support for the most R&D intensive small and medium size firms will be available through Innovate UK’s grants and loan scheme.
Innovate UK, the national innovation agency, will accelerate up to £200 million of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis. An extra £550 million will also be made available to increase support for existing customers and £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding. The first payments will be made by mid-May.
This package builds on the government’s existing support for innovative, high-growth firms including the £2.5 billion British Patient Capital fund, the upcoming £200 million Life Sciences Investment Programme, internationally competitive R&D tax reliefs and our major commitments to increase public R&D spending to £22 billion by 2024-25.
The £500 million Future Fund is comprised of £250 million from government combined with equal match funding from private investors. For further information and updates on detail for eligibility criteria and fund operation, visit the GOV.UK website here.