Firms in London and the South East of England have received the lion’s share of the UK Government’s £1.2bn convertible loan Future Fund.
The fund, which closed to new applications in January and is administered by the UK Government’s economic development bank the British Business Bank, has provided finance to 1,236 mainly tech-focused firms.
Some 845 firms in London and the South East have secured £867.9m (70% of the total) of the funding, which has already seen a number of companies converting debt into equity so giving the UK Government ownership stakes.
A condition of the Future Fund is that when debt is converted into equity the UK Government gets a stake at a 25% discount to the required match funding investors.
The British Business bank said London accounting for 60% of companies is in-line with the wider market trends for equity investments. Its 2019/20 Small Business Finance Markets report showed that London received 66% of equity investment by value in 2019.
Future Fund Regional Breakdown
| No. of convertible loans approved |
Value of convertible loans approved |
|
| East Midlands |
16 |
£18.9m |
| East of England |
89 |
£91.7m |
| London |
696 |
£720.1m |
| North East |
34 |
£31.7m |
| North West |
81 |
£67.6m |
| Northern Ireland |
14 |
£13.6m |
| Scotland |
22 |
£8.6m |
| South East |
139 |
£147.8m |
| South West |
49 |
£33.6m |
| Wales |
22 |
£11.9m |
| West Midlands |
39 |
£24.5m |
| Yorkshire and the Humber |
35 |
£33.7m |
| Total |
1236 |
£1203.7m |
In Wales some 22 firms have secured backing from the fund with a total investment level of £11.9m. Recipients include hydrogen car venture Riversimple and cleantech firm Hydro Industries. Hydro has seen the debt converted into a 2.5% stake for the Westminster government.
In Scotland 22 firms have secured £8.6m of funding. London has seen 696 firms securing £720.1m with the South East 139 firms receiving £147.8m.
Senior management teams consisting solely of ethnic minority team members, and those with both ethnic minority and white team members, account for 61.6% of funding to companies that have been approved funding of £683.5m.
