The scheme, which totals £1.3bn, comprises of a £500m fund for high-growth companies and additional support, worth £750m, for companies that are involved in research and development.
"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," said the chancellor.
With thousands of businesses being impacted by the shutdown, the government wants to ensure that the economic impact of the current crisis doesn’t kill off some of the UK's fastest growing and most innovative companies.
The first payments will be made by mid-May but to qualify, a company must have raised £250,000 privately in the last five years and any money put in by the government will need to be matched by private investors. If the money is not repaid, the government will also be able to take an ownership stake in the company.
Commenting on the announcement Ritam Gandhi, Founder and Director, Studio Graphene said, “The nation’s early stage businesses have been in limbo for too long, with many deliberately loss-making start-ups falling between the cracks of state-backed loan schemes."
According to Gandhi, these new relief proposals will give fledgling UK companies some financial breathing room while they ride out the storm.
However, few tech start-ups in the UK are confident in the government's ability to support the private sector and research by Studio Graphene found that 69% of UK tech start-ups did not have faith in its ability to support the private sector through the pandemic.
"New measures like the Future Fund unveiled could reverse this sentiment and settle some nerves," according to Gandhi, although he urged the Government to do more.
The package has been broadly welcomed by the entrepreneur community but there is a worry that, as we’ve seen with other schemes devised by the Government, it’s very complexity may well delay the delivery of help companies so desperately need.
