THE York economy still has a high reliance on low-skilled and low-paid employment.

Investment is needed in the people and the companies looking to develop high added-value technologies, products and services which will shape our future economy and environment.

The Government’s Future Fund will help fundraising by companies which don’t qualify for CBILS or other schemes because they are not yet meeting the criteria for the schemes aimed at helping more mature businesses.

The loans available under the scheme are convertible into equity, so it’s important for companies looking to take advantage of the scheme to talk to people who have knowledge and experience of the funding trajectory of high-growth businesses.

The scheme also requires matched funding from private investors, be they venture capital funds or angel investors. Companies will need advice on how to co-ordinate co-investment by multiple parties and, indeed, where to look for suitable private investors who can come in and so unlock access to the Future Fund.

The scheme will not help very early stage companies, because one of the requirements is that a company must already have raised at least £250k from third party private investors in the last five years. The thinking may be that very early stage projects can be moth-balled for the duration. This Fund is to support companies that are up and running and are burning cash which will be exhausted unless further funding comes in.

The terms required by the Government will be not less than those given to the private investors and as a minimum the interest rate will be 8%, the conversion will be at a 20% discount to the price of the next funding round and the redemption premium 100%. This is not cheap money but rather reflects the typically high risk nature of early stage funding.

Getting this funding in place is going to be technically more demanding than accessing CBILS or the job protection furlough funding. But it does offer a potential lifeline for early stage high-growth potential business.

For advice, contact Jonathan Oxley, chairman and corporate finance partner at Lupton Fawcett LLP on 01904 561452 or