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£500m fund launched for innovative firms during pandemic

Government scheme will provide grants and loans, but BioIndustry Association calls for more comprehensive support

The UK government has launched its previously announced £500 million scheme to provide grants and loans to high-growth companies during the coronavirus pandemic.

The Future Fund will provide companies with between £125,000 and £5m in convertible loans from the government, with private investors expected to provide matched funding, the Treasury said on 20 May.

The launch follows calls for measures to lessen the impact of the virus on UK biotech. “The disruption caused by the pandemic has made laboratory research impossible for many companies and slowed or halted clinical trials across the UK,” said Martin Turner, head of policy and public affairs at the BioIndustry Association, which has campaigned for government support.

“Innovative businesses are facing an uncertain climate for fundraising in the months and potentially years ahead,” he said. “The Future Fund will help shore up investor confidence and provide welcome capital to support R&D and business growth.”

But he added that the government had “prioritised simplicity over adaptability in its design of the convertible loans, meaning there will be many businesses ineligible or unable to access the Future Fund”.

“Government must monitor this carefully and stand ready to take further action if quality companies are found to be losing out,” he said.

Turner added that the second strand of the fund—continuity loans and grants—only applied to existing Innovate UK customers.

“We need to see action for the rest of the community as well, including the rapid relaunch of successful established schemes like the Biomedical Catalyst, which are proven mechanisms to boost innovation and economic growth,” he said. “These will be vital to the UK’s social and economic recovery.”

Meanwhile, the Department for Business, Energy and Industrial Strategy has announced that it is doubling investment in its Fast Start Competition, bringing the total to £40m. Projects set to benefit from the funding include virtual reality training platforms for surgeons, virtual farmers’ markets and other innovations that have emerged since the outbreak of Covid-19.