COVID-19: Future Fund convertible loan scheme - Updated: 17 Nov 2020

  • Coronavirus: Future Fund convertible loan scheme

    The Future Fund convertible loan scheme offers convertible loans to high growth innovative companies who are facing financial difficulties due to the COVID-19 outbreak. The application deadline for loans from the Future Fund has been extended to January 31 2021.


    The new scheme is administered by the British Business Bank and will offer unsecured bridge government funding of up to 50% of the total bridge funding being received by a company, where the remaining amount is being provided by private third-party investors.


    The scheme may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme.




    • The scheme is open to companies who have a ‘substantive economic presence in the UK’ and have already raised at least £250,000 from third-party investors in the last five years.
    • The bridge funding will automatically be converted into equity on the company's next qualifying funding round, at a minimum conversion discount of 20% to the price set by that funding round.
    • The bridge funding must only be used for working capital and cannot be used to repay any borrowings, pay dividends or bonuses or, in respect of the government part of the loan, pay any advisory or placement fees or bonuses to external advisers.
    • The minimum amount of lending provided by the government under the scheme will be £125,000, up to a maximum of £5,000,000.
    • The minimum interest rate for the government will be 8% on a non-compound basis, with interest to be paid when the loan matures.
    • The loan will mature after a maximum of 36 months.
    • Applications must be made by 30 September 2020.




    • Companies must be UK-incorporated and if part of a corporate group, only the parent company is eligible.
    • Companies in receipt of the loans will be required to have previously raised at least £250k in equity investment from third-party investors in the last five years.
    • Only eligible companies that can attract at least 50% of third-party investment will receive funding.
    • Companies cannot have any of their shares traded on a regulated market, multilateral trading facility or other listing venue.
    • The company must have been incorporated on or before 31 December 2019
    • At least one of the following must be true for the company:
      • Half or more employees are UK based.
      • Half or more revenues are from UK sales.


    The scheme was launched on 20 May 2020. It will is delivered in partnership with the British Business Bank.


    What's New?


    30 June 2020:


    • Changes were made to the scheme conditions so that UK companies who have participated in highly selective accelerator programmes which required then to have non-UK parent companies are now eligible to apply for investment.
    • The 'substantive economic presence in the UK' condition must still be met by the company applying for investment.


    Novmber 2020


    • The application deadline for loans from the Future Fund has been extended to January 31 2021.


    Useful guides on this topic


    COVID-19: Government support tracker


    This tracker covers measures announced by the government to support individuals and businesses, as we get through COVID-19.


    External links


    British Business Bank Government Future Fund

    Future Fund Eligibility Checklist

    Guidance: Apply for the coronavirus Future Fund





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