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Sources of funding during the COVID era

Updated: Mar 9, 2021

If you want to extend your cash runway and you’ve done everything possible to improve revenue and decrease future costs, then the next option is to raise capital. In this article, we'll run through potential sources and their specific requirements, with a focus on the UK and some links at the bottom to resources relevant for France, Germany, and Ireland.

Private investment

VC Funds, Angels / EIS funds, Venture Capital Trusts, and CVCs

To cut right through the noise, we've written an article on what factors to consider when assessing whether a fund is really open for business in the current climate, alongside a list of 150 emerging managers that have raised a fund recently and those who have deployed capital recently.

We've also written articles on How to pitch for startup remotely and What you need to think about as Founders before raising your next round.

Government initiatives


This has been covered in detail online so we won’t go in-depth, but essentially grants are available up to 80% (capped at £2.5k) to companies until (for now...) the end of October that would otherwise have had to lay off employees.

Update: From August, employers must pay National Insurance and pension

contributions, then 10% of pay from September, rising to 20% in October.

Future fund

After some lobbying by Save our Startups, the government proposed this fund to support but has drawn a lot of criticism.

The government matches private investment into startups on a 1:1 basis up to a maximum of £5 million, and a minimum of £125,000. To be eligible, you must must be an unlisted UK registered company that has previously raised at least £250,000 in the last five years.

If you’re already VC backed and have raised over £250k already, you're looking for £125k - £5m, have no outstanding debt / ASAs / convertibles, and already have investors linked-up that are willing to come in on commercial government control terms, without the EIS tax wrapper, then this is the option for you!

Apply through the portal.

COVID Business Interruption Loans (CBIL)

As most startups are loss-making through the nature of their businesses, this is unlikely to be very relevant for most. The key quote being…

“You need to show that your business would be viable were it not for the pandemic”

The government has applied arbitrary requirements to prove business viability, so if you weren’t profitable before the pandemic you’re unlikely to be accepted.

Bounce back loans

These are relevant for a number of tech companies and amount to £2k - £50k, capped at 25% of turnover, interest-free for a year ("The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.") for companies struggling to access other forms of credit.

The government guarantees the loan 100% (unlike CBILS) to ensure lenders

lend, and startups should be able access the cash within days.

Apply through an approved lender.


  • R&D - Considering a shorter accounting period for this year will allow you to claim tax credits earlier for short term cash flow needs

  • VAT - Payments due have been deferred until the 20/21 tax year-end

  • Deferred tax - The 3.5% annual interest on deferred tax payments has been waived


There have been some cool grants announced recently which could support your product road-map if positioned right, some examples of these are…

  • Innovate UK

£200m of grant and loan payments will be accelerated to existing

Innovate UK customers. £550m of fresh funding for R&D intensive projects for both new and existing customers in grants and loans. So far, £40m has been handed out via the Fast Start competition.

Apply through the competition portal.

Other sources of grants:

Wider European support

We’ve included some links for a few countries and articles below if you’re a non-UK European company. Hint, there's a lot of support available out there!

🇫🇷 France (in french)

🇩🇪 Germany

🇮🇪 Ireland

Get in touch if you’d like support with applying for any of these options or to discuss your Next Round!

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