The UK government will close the first of its emergency loan schemes launched at the start of the pandemic this weekend after lending more than £1bn that could convert into stakes in fast-growing start-ups.

The final amount lent under the Future Fund scheme is more than four times that originally planned by Treasury officials when it opened in May, underscoring the need for funds among the UK’s start-up sector during the pandemic.

But the terms of the innovative scheme have also proven attractive to many start-ups: the government loans need to be matched by private investment and will convert into equity stakes at the next fundraising unless repaid.

This means that the government could be left with stakes in scores of British start-ups after 1,055 companies signed up to the scheme, borrowing £1.067bn. The Future Fund offers loans from £125,000 to £5m, with a minimum of 8 per cent interest that accrues until the loan converts — when it is either repaid or turns into government equity.

All the Treasury’s other loan schemes have been extended until March 31, although business groups are now lobbying for these deadlines to be pushed back again until the summer to continue to help businesses in the latest national lockdown.

Treasury officials have told tech executives that they will keep the Future Fund under review next month ahead of the Budget in case there is any clear shortfall in funds for the sector, according to people familiar with the conversations. But these people also said that there was less of a clear need for government funds in a sector where venture capital firms have billions of pounds to invest.

According to data published on Thursday, about two-thirds of the funds went to start-ups in London and the South East, with about £300m going to companies outside London.

Only 3 per cent of funds went to Scotland, Wales and Northern Ireland. Wales had the lowest number of start-ups that used the scheme, with just 18. About a quarter of the start-ups had all-male teams, and about 40 per cent were all white.

The numbers are not final, with start-ups able to apply until Sunday night. There have been 1,616 applications since the scheme launched in May last year.

The Future Fund was set up to help businesses unable to access other government business loan programmes. Start-ups tend to be lossmaking initially to enable them to grow fast, relying instead on equity from their investors, but this excludes them from other schemes. Since March 2020, more than £69bn has been lent to 1.5m businesses under the four government loan schemes.