The British Business Bank has launched Northern Powerhouse Investment Fund II (NPIF II), a £660m initiative to bolster economic growth across the North of England.  

The NPIF II is aimed at enhancing the availability and variety of early-stage finance for smaller businesses in the North, offering funding to companies that might otherwise struggle to secure investment.  

This initiative will provide loans ranging from £25,000 to £2m and equity investments of up to £5m. 

Since the inception of the original Northern Powerhouse Investment Fund in 2017, the scheme is said to have facilitated over £1bn in direct and private sector co-investment.  

The second phase of the fund will support companies in the North West, Yorkshire and the Humber, and Tees Valley.  

The fund can now also be accessed by companies throughout the North East, the bank said. 

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Nine fund managers have been appointed to oversee the allocation of NPIF II.  

In the North West, GC Business Finance & River Capital will manage smaller loans, FW Capital will handle larger loans, and Praetura Ventures will oversee equity deals.  

Yorkshire and the Humber will see Mercia delivering debt finance and equity finance, with the Business Enterprise Fund providing smaller loans.  

NEL Fund Managers will offer similar services in the North East, with Maven Capital Partners managing equity investments. 

British Business Bank CEO Louis Taylor said: “The success of the first Northern Powerhouse Investment Fund has proven the instrumental change that access to finance can have for small businesses.  

“From creating hundreds of jobs to developing ground-breaking products, we have seen companies that previously lacked funding options accelerate forward in their growth journeys, which has ultimately benefitted the whole of the Northern economy. 

UK Minister of State for Enterprise, Markets, and Small Business Kevin Hollinrake said: “This new fund will unlock millions in equity and loans for SMEs across the North to realise their full potential and builds upon British Business Bank’s vital work ensuring that any small business owner in the UK can scale up and grow.” 

The British Business Bank’s recent Small Business Finance Markets report highlights a growth in asset finance lending for small businesses.  

The report, covering the period from 2014 to 2023, shows a 7% increase in new business for the asset finance sector, reaching £23.5bn last year.