A £660 million investment fund to support the growth of small and medium-sized businesses across the North of England is on course to be launched early in 2024.
This follows a £400m investment fund to support the growth of small and medium-sized businesses across the Midlands. The Midlands Engine Investment Fund II (MEIF II) is being delivered by the British Business Bank, bringing the total it has specifically earmarked for investment in the region to over £700m since 2017.
The Northern Powerhouse Investment Fund II is one of a series of new Nations and Regions Investment Funds being launched by the British Business Bank which will deliver a £1.6 billion commitment of new funding to drive sustainable economic growth.
The Northern Powerhouse Investment Fund II will offer a range of commercial finance options with loans from £25,000 to £2 million and equity investments up to £5 million. The new fund will cover the entire North of England including Greater Manchester, Liverpool City Region, Lancashire, Yorkshire & the Humber, Cheshire & Warrington, Cumbria, County Durham, Tyne & Wear, and Northumberland.
The fund will address an identified funding gap in the North of England and increase the supply and diversity of early-stage finance for smaller businesses. Similar funds are launching for the South West, Wales, Scotland and Northern Ireland, along with a follow-on fund for the Midlands.
The new fund builds upon the success of the regional investment funds already being delivered by the British Business Bank through the Northern Powerhouse (NPIF), Midlands Engine (MEIF) and Cornwall and Isles of Scilly (CIoSIF) Investment Funds.
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Since the existing funds launched, the Bank has invested more than £648 million into NPIF, MEIF and CIoSIF. This investment has crowded in more than £1 billion in additional private sector co-investment and has supported more than 1,887 smaller businesses.
Ken Cooper, managing director of Venture Solutions, at the British Business Bank, said: “The launch of the Northern Powerhouse Investment Fund II builds on the success of its predecessor.
“It will further increase the supply and diversity of early-stage finance for smaller businesses in the region, providing finance for firms that might otherwise not receive investment and helping to break down barriers in access to finance.
“The first Northern Powerhouse Investment Fund has facilitated the investment of more than £1 billion into northern businesses since it launched and has been instrumental in the creation of thousands of new jobs and opportunities.
“We know that the levels of private debt lending and equity investment in the North of England remain below expectations given the region’s share of the UK’s smaller business population and that is something this next generation of the fund will continue to address by backing ambitious businesses that will drive sustainable economic growth.”
The Northern Powerhouse Investment Fund II will operate across three tiers: smaller loans (£25K-£100K), debt (£100K-£2 million) and equity (up to £5 million).