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The Government and British Business Bank have now released some much needed clarity on eligibility criteria for the Future Fund, the application process and timing. Key points to take away are:
– The scheme will open for applications on 20 May 2020.
– Applications will be investor led meaning that the lead investor makes the application in connection with the eligible company and on behalf of any other investors. Investors are only eligible if they all fall within one of the following categories:
– The eligibility requirements for applicant companies have also been updated:
– AIM quoted companies do not qualify for the scheme, nor do companies with shares admitted to trading on any similar market, stock exchange or listing venue.
– The investee company cannot choose to repay the loan or repay it early. It will either convert into shares or be repayable in the specific circumstances outlined in the documentation: exit events, maturity or on default.
– No specific information has been provided with what information will need to be provided on receipt of the funding on an ongoing basis save that it has been confirmed that the Future Fund will require the same information that current shareholders receive and will require information to be submitted quarterly via an online portal for portfolio managing purposes.
– Advanced Subscription Agreements and historic Convertible Loan Notes will not qualify as matched funding and nor do they qualify as equity raised until they are converted into shares.
– Specific tax advice should be sought as to whether an investment will be SEIS or EIS compatible and/or whether it will prejudice prior reliefs.
This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Corporate & Commercial team at Cleaver Fulton Rankin for further advice or information.