Companies can apply for the fund from 20 May but potentially only fifty companies can benefit as applications are processed on a first-come-first-served basis. Companies can apply for up to £5m in matched funding until the Government’s commitment of £250m is fully utilised.
Smaller companies and those in most need of support could be left behind and may find the pot has been fully utilised by the time they can get their matching lenders in place.
More established companies are likely to be able to access the Future Fund more quickly as they will be able to show any historic fundraising that is required as part of the application and will have relationships with third party investors that they can utilise to secure the necessary matched funding. These businesses can act quickly and be first in line to take a share of the pot.
Privately matched funding will not be eligible for Enterprise Investment Scheme (EIS) relief and it is disappointing that the Government did not allow this, and it does not seem clear why. There is a possible issue that the investment via this route will prevent future investments qualifying for EIS – the FAQs say previous investments will not be tainted but it’s silent on future investments. This is another concern for investors.
If you would like to discuss any of the above or have other queries about how you can make the right decisions for the future of your business and your income, please contact your usual Blick Rothenberg contact or David Hough.
You can also visit our Coronavirus – Practical Guidance for businesses today Hub for our latest updates and insights.