The announcement of a £1.25 billion boost for the UK’s innovative businesses is particularly relevant for Norfolk’s tech sector, says Mary Schofield of Lovewell Blake.
The package, announced on Monday, is a response by Chancellor of the exchequer Rishi Sunak to sustained lobbying from business groups representing firms in some of the most dynamic sectors of the economy, which had been largely left behind by the various business support initiatives announced as the crisis unfolded.
The new package particularly targets SMEs focusing on research and development, many of which are in the stage of development at which they are yet to commercialise their product and turn a profit.
Half a billion pounds will make up a ‘Future Fund’, designed to ensure high-growth companies receive the investment they need to continue during the crisis. It will provide loans of between £125,000 and £5 million, which need to be matched by private investors, and is available to firms which have already raised at least £250,000 in equity investment in the last five years.
But perhaps more relevant for Norfolk’s tech sector will be the £750 million of targeted support for R&D intensive SMEs, which will be made available through Innovate UK’s grants and loan scheme. This money will be made available both as increased support to existing Innovate UK customers, but also offered to firms which are not currently in support of funding from the body.
The first payments are expected to be made in May.
It is encouraging that the government has listened to the lobbying and realised that this is a sector which could play a leading part in rebuilding the economy once the crisis is over, and it deserves support. As the Chancellor said at the launch, it’s important to protect such businesses through the crisis “so they can continue to develop innovative new products and help power UK growth.”
For many developing tech businesses in Norfolk, this initiative could be a lifeline, and is one which they should consider seriously. This isn’t no-strings help – the loans will have to be repaid, or converted into equity – but nevertheless it is a welcome and timely fillip for an important sector for our local and national economy.