Over the past couple of days, the government has announced two major policy changes to support innovative businesses affected by the COVID-19 crisis. In this Policy Update, we’ll explain the new measures and how they could affect your business.
First, due to popular demand the government will expand the Future Fund from £250m to £500m. The British Business Bank has already approved £320m of matched convertible loans to businesses across the UK.
In welcome news, after lobbying from a range of innovative businesses and groups (including ourselves) businesses with headquarters outside the UK are now able to apply provided that at least half of their staff are based in the UK and that they make at least 50% of their revenues from UK sales. This ensures that startups who have participated in prestigious US accelerator programmes such as Y-Combinator are no longer barred.
If you want a refresher on the Future Fund, check out this previous policy update.
Second, the government has announced £191m in Innovate UK funding to help startups across the UK who need urgent financial support to keep their cutting-edge projects and ideas alive. The Sustainable Innovation Fund will also be open for startups working on sustainability-focused projects, such as “apps encouraging people to cut down their food waste” and more sustainable forms of packaging.
There are few conditions on the fund. First, your business needs to either have been affected by the impact of COVID-19 or working on a project related to the recovery. Second, if your project duplicates work that’s already being funded by other UK or EU programmes such as the rapid manufacturing of ventilators or vaccines it is not eligible. Third, you may be ineligible for funding under state aid rules if you’ve received more than €800,000 from other COVID-19 related schemes like the Coronavirus Business Interruption Loans Scheme (CBILS). Fourth, there must be at least one SME involved in the project. Finally, they won’t fund feasibility studies.
The first round of funding has up to £55m allocated towards it. You can apply for up to £175,000 in funding, but if you’re collaborating with another business or university then the project can receive up to £500,000. They’re looking for projects that will have a direct impact on the recovery so any project must last between 3 and 9 months.
You can apply for the scheme and find out more about the various rules and regulations on projects here.