The Future Fund, announced by the Chancellor on 20 April, opened for applications today. The scheme, for which the Government has initially made £250 million available, will issue convertible loans to UK fast-growth companies that ordinarily rely on equity investment and are currently affected by Covid-19. The scheme is being delivered through the British Business Bank.

An investor, or lead investor of a group of investors, may make an application in respect of an investment in an eligible company. The Future Fund will match up to 100% of the amount provided by investor(s), up to a maximum of £5 million. Funding must not be used to (a) repay any borrowings; (b) pay any dividends; (c) pay any bonuses; (d) pay any advisory fees.

Investors and the Future Fund both invest using a convertible loan agreement, which is pre-defined and cannot be negotiated. The loans will convert into shares in the company in certain circumstances, including an exit or a new funding round. The loans will convert into shares in the company in certain circumstances, including an exit or a new funding round.

There are eligibility criteria for both the company and the investors.

Further information can be found on the British Business Bank website.