Future Fund may not help many companies and smaller businesses could be left behind
The governments “Future Fund” to provide funding to innovative companies with high potential may benefit very few, say leading tax and advisory firm Blick Rothenberg.
David Hough, partner at Blick Rothenberg said: “Companies can apply for the fund from today 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.”
He added: “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.”
David said: “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.”
He added: “Private matched funding will not be eligible for EIS relief and It’s 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.”