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.
Rishi Sunak said 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.”
Alok Sharma, Business Secretary, said:
“The UK is a world leader in innovation and at this hugely challenging time, we know that young, fast-growing firms require tailored support to see them through.
“This wide-ranging package delivers important help that will protect some of the most dynamic sectors of our economy.”
Secretary of State for Digital, Culture, Media and Sport, Oliver Dowden, said:
“We are the tech and creative capital of Europe, and it’s crucial to maintain our place. This funding will protect high growth businesses and enable the unicorns of tomorrow to thrive so that tech is in pole position to drive our post COVID recovery.”
The £500 million Future Fund has been designed to ensure high-growth companies across the UK receive the investment they need to continue during the crisis.
Delivered in partnership with the British Business Bank and launching in May, the fund will provide UK-based companies with between £125,000 and £5m from the government, with private investors at least matching the government commitment. These loans will convert to equity if 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 £250m 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.
The £750m 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 £200m of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis. An extra £550m 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 £2.5bn British Patient Capital fund, the upcoming £200m Life Sciences Investment Programme, internationally competitive R&D tax reliefs and our major commitments to increase public R&D spending to £22bn by 2024-25.