Almost half of the companies supported by a state fund would have gone bankrupt in the pandemic without their support, according to a new report.
British Business Bank’s £1.14bn support for 1,190 businesses helped 48 per cent avoid bankruptcy during coronavirus uncertainty.
The BBB assessment said that more than 60 percent did not believe they would have been able to fundraise independently, while 85 percent of grantees have since taken on R&D initiatives.
The project, which had the short-term goal of increasing the availability of equity financing for businesses affected by Covid, was found to have met that goal according to the assessment, carried out by consultancy RSM UK.
“COVID-19 presented monumental challenges for British business, which is why it was so important that the government stepped in during their time of need,” said Business Secretary Grant Shapps.
“Whether it’s supporting companies to stay open or equipping them to access capital and grow, today’s findings highlight the Future Fund’s vital role in keeping our most innovative companies running during a challenging time.”
The fund provided loans through schemes to 1,190 companies, which had a total of more than 28,000 employees. These funds had to have at least equal funding from investors, and the scheme was implemented in May 2020 until January 2021.
According to the report, companies were at reduced risk of closure and long-term damage as a result of the manure, even though the pandemic forced the number of stock deals to plummet 32 percent in early 2020.
Ken Cooper, managing director of risk solutions at British Business Bank, said: “The Future Fund was created at a time of great uncertainty in the venture capital markets and when the country was learning new ways of working during a pandemic.
“Against that backdrop, to see the positive results reflected in this independent evaluation is fantastic. We support more than a thousand companies, many of which have since secured subsequent investment where they otherwise would not have survived.”