Innovation and tech companies are being offered assistance with the Treasury announcing hundreds of millions of pounds of loans and grants for the sector.
The £1.25bn package of funding includes £750 million of loans and grants for innovative businesses and up to £250 million from the Government for an investment fund for high-growth companies – match-funding private sector money to take the total fund to £500m, and convertible loans into an equity stake if not repaid.
The fund will be £500m in size, 50/50 split between the private and public sectors.
The £750m of targeted support for research and development will be available through Innovate UK’s grants and loan scheme, allocated if a company passes an ‘innovation assessment’.
The £500m investment scheme will launch in May through the British Business Bank. It will provide UK-based companies with between £125,000 and £5m of Government funding, with private investors matching their side, as long as the company has previously raised equity from a third party. It is a convertible loan, so if it cannot be repaid, the money will convert into equity. The eligibility criteria has been set that a business must have raised at least £250,000 in equity investment from a third party over the past five years.
The focus now will be meeting the deadlines for these schemes going live, ensuring they are accessible and that a wide range of investors can take part in the co-investment fund.