The new scheme will match up to £250 million of private investment and add £550m to an existing loan and grant scheme for smaller firms that focus on research and development.

In total, the new funding amounts to £800m of new money to support emerging firms.

However, in order to qualify for the scheme, a company must have raised £250,000 privately in the last five years.

On top of that, any money put in by the government must be matched by private investors.

Also, if the money is not repaid, the government will take an ownership stake in the company, BBC News reports. 

The funding package has been broadly welcomed by the entrepreneur community but some have warned that the initiative is too complex, meaning that gaining access to the funding could prove difficult, which could mean that firms will have to wait longer to receive the funds. 

Chancellor Rishi Sunak said start-ups would help power the UK’s growth after the coronavirus crisis. He said: “This new, world-leading fund will mean they can access the capital they need at this difficult time, ensuring dynamic, fast-growing firms across all sectors will be able to continue to create new ideas and spread prosperity.”

Suren Thiru, British Chambers of Commerce (BCC) head of economics, commented: “The Future Fund will help provide urgently needed support for many of our most innovative and fast-growing businesses around the UK, as we have urged. 

“The fund fills an important gap in existing government support and could make a real difference to entrepreneurial firms navigating challenging circumstances. It’s crucial that this enhanced support reaches companies in difficulty as quickly as possible.” 

Dr Liz Cameron OBE, chief executive of the Scottish Chambers of Commerce, said: “The entrepreneurial pedigree of Scotland and the UK’s start up community has helped build up a world-renowned international reputation for creativity and innovation.

“There were gaps in the current major support measures that meant that these newer companies were not able to access the existing Covid-19 business support schemes. This new package will enable these fast-growing and dynamic businesses to continue trading with more ease of mind, at the very forefront of our most cutting-edge sectors and technologies.

“The most important thing now for firms is ease and speed of access to this support. This funding must be made available as soon as possible, with as few administrative hurdles as possible, in order to safeguard against the potential of firms folding in the time it takes for this support to be accessible.’’

• Read all of our articles relating to COVID-19 here.