Posted: Tue 20th Jun 2023
The British Business Bank has confirmed that a £400m fund for businesses in the Midlands and £660m for firms in Northern England will launch next year.
The Midlands Engine Investment Fund (MEIF) II follows the £200m provided to 565 businesses since MEIF launched in 2017.
The latest funding will operate across three tiers: smaller loans (£25,000-£100,000), debt (£100,000-£2m) and equity (up to £5m).
The British Business Bank is inviting proposals from fund managers to operate the Midlands Engine Investment Fund II. It expects to appoint fund managers in the final quarter of 2023, with the new fund due to launch in Spring 2024.
Ken Cooper, managing director, venture solutions, at the British Business Bank, said:
"The new fund will further develop the region's economic prospects through an increase in the supply and diversity of early-stage finance for small businesses, providing finance for firms that might otherwise not receive investment and helping to break down barriers in access to finance.
"The Midlands has a long history of entrepreneurship and by backing entrepreneurs and businesses with growth plans MEIF2 will have a positive impact on the region's economy. The businesses we back will be creating skilled jobs, fuelling green growth and introducing innovation in products and processes."
Northern Powerhouse Investment Fund II
Also launching in 2024 is the £660m Northern Powerhouse Investment Fund II.
Like the Midlands scheme, it will offer loans from £25,000 to £2m and equity investment up to £5m.
The 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.
Ken Cooper added:
"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."
Fund managers can apply to operate the Northern Powerhouse Investment Fund II via the British Business Bank website.
The funding allocation was first announced in the government's 2021 Autumn Budget. The aim is to close the business funding gap between London/South East and other regions of the UK.
The £200m South West Investment Fund, which covers Bristol, Cornwall and the Isles of Scilly, Devon, Dorset, Gloucestershire, Somerset and Wiltshire, is due to launch this year.