A new fund aiming to invest £660m in companies across the North of England has been launched by the British Business Bank.
The Northern Powerhouse Investment Fund II will provide loans from £25,000 to £2m and equity investment up to £5m.
The second Northern fund comes after the British Business Bank launched the £400m Midlands Engine Investment Fund II last month.
The first fund was launched in 2017 and has so far provided more than £1bn of direct and private sector co-investment across the North West, Yorkshire, Humber and Tees Valley.
The new Northern Powerhouse Investment Fund II will also expand across the whole of the North East for the first time.
In a statement, the British Business Bank said the new fund would drive “sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the North”.
It added that the fund will also “increase the supply and diversity of early-stage finance for Northern smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance”.
Louis Taylor, chief executive of the British Business Bank, 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.
“This is why it was important to continue the Northern Powerhouse Investment Fund into its next phase.
“With further funding available, and a greater geographical reach in the North East, the Northern Powerhouse Investment Fund II will engage more stakeholders across the regions, bringing the business community closer together to create more opportunities for entrepreneurs everywhere.”
The Northern Powerhouse Investment Fund II has been launched by the British Business Bank.
In the North West, GC Business Finance and River Capital will manage the smaller loans part of the fund (£25,000 to £100,000), FW Capital will be responsible for larger loans (£100,000 to £2m) and Praetura Ventures will manage equity deals (up to £5m).
Kevin Hollinrake MP, minister of state for enterprise, markets, and small business, added: “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.
“SMEs are the engines of growth for our economy and across government we are improving access to finance, cutting red tape and removing barriers to ensure that they can go further and faster than ever before.”
In Yorkshire and the Humber, Mercia will deliver debt finance (£100,000 to £2m), as well as equity finance (up to £5m) to smaller businesses with Business Enterprise Fund (BEF) delivering smaller loans between £25,000 and £100,000.
NEL Fund Managers (NEL) will provide both smaller loans (£25,000 to £100,000) and debt finance (£100,000 to £2m) to North East businesses with Maven Capital Partners managing equity deals up to £5m.