Mayor of London and British Business Bank Launch £70m Future London Growth Fund to Bridge Startup Lending Gap
The Future London Growth Fund, a £70 million debt facility targeting London-based scaleup businesses, launched on Thursday 22 October 2026. The fund is managed by investment firm FSE Group and has secured cornerstone commitments from the British Business Bank, which is contributing £20 million, alongside Funding London, the Mayor of London's investment arm, operating as part of the London Growth Plan. The fund will offer loans of between £1 million and £3 million to businesses across all 32 London boroughs and the City of London, targeting companies with strong growth prospects that may not yet be profitable. It is designed to sit between conventional bank lending and larger venture debt (longer-term loans extended to high-growth businesses, typically secured against future revenue) deals, addressing a financing gap that founders have identified as pushing promising companies to scale overseas. FSE Group aims to support 40 to 50 businesses with the initial £70 million and plans to reinvest repaid capital to extend its reach over time. The fund will not concentrate on a single technology sector, with Kala Desai, head of the Future London Growth Fund at FSE, describing eligible borrowers as 'innovative, high-growth businesses which have already demonstrated strong commercial performance' across sectors including healthcare, education, transport, data, enterprise software, advanced manufacturing, and sustainable solutions. Research from the British Business Bank found that just 71% of London business owners reported making a profit, compared with 84% nationally, underscoring the capital's particular challenge in converting its startup density into profitable scaleups.
Why this matters
The fund addresses a well-documented structural gap in UK venture and growth finance: the space between conventional bank loans and large institutional venture debt is where many high-growth but pre-profitability businesses fall out of the market. By backing FSE as manager with public capital from the British Business Bank and the Mayor's office, the scheme de-risks the lending decision in a way that purely commercial lenders have not been willing to do. For London's competitiveness as a startup hub, the fund signals a policy commitment to keeping scaleup activity in the capital rather than losing founders to US or European markets with deeper growth finance ecosystems.
On the Ground
The fund will generate banking and finance advisory work: loan documentation, facility agreement negotiation, security structuring, and ongoing covenant compliance advice for borrowers. Firms with established venture and growth lending practices will see client demand from FSE Group and from borrower companies seeking advice on loan terms. A trainee working on an FSE fund facility would assist with CP (conditions precedent) checklist management, review facility agreement schedules, coordinate security document execution, and draft or check drawdown and utilisation request letters.
Interview prep
Question you might get
“How would you structure a loan facility for a pre-profitability tech scaleup, and what security options are available to a lender where the borrower's assets are primarily intangible?”
Sign up free to see the full answer
A model answer you can lift into an interview — how to frame this story for a partner.
Sign up freeSources
My notes
saved