Small businesses in the North of England could soon receive loans of up to £750,000, as the government-backed British Business Bank (BBB) announces the launch of the Northern Powerhouse Investment Fund.
Financed by the BBB and the European Investment Bank, the £400m fund is set to provide investment for new startups as well as growing companies looking for additional finance to scale up.
The Northern Powerhouse Investment Fund will be split into three strands of finance for small firms with differing levels of funding available.
- Microfinance (£25,000 – £100,000)
- Business loans (£100,000 – £750,000)
- Equity finance (up to £2m)
Finance will be allocated through regional growth hubs, banks and ten Local Enterprise Partnerships (LEPs).
Commenting on the launch of the Northern Powerhouse Investment Fund, Keith Morgan, BBB CEO, stressed the “enormous untapped potential” of small firms in the North of England.
“The Northern Powerhouse Investment Fund represents a coordinated policy approach to help realise this potential across the North,” Morgan said in a statement.
In a new report adding detail to the plans to support small enterprise in the North of England, the BBB stated that the Northern Powerhouse area generates 19 per cent of the UK’s GDP, and represents a larger economy than several European states including Norway, Belgium and Ireland.
The government’s Northern Powerhouse minister, Andrew Percy, added that more founders should expect to benefit from investment.
“Our efforts to build the Northern Powerhouse are delivering real results for local people, with over one million businesses involved, foreign direct investment up by a quarter and 187,000 jobs created in the past year alone.
“This dedicated £400m will help us go even further, supporting smaller business owners across the region to reach their full potential and helping to create an economy that works for everyone.”
Speaking at the Northern Powerhouse International Conference and Exhibition on 21 February, Richard Gregory, chairman of the Yorkshire Bank, said the challenge of such development initiatives was to ensure growth across rural areas and urban districts, as well as to “relatively successful metropolitan centres”.
Prime minister Theresa May’s recent industrial strategy plan pledged to deliver economic growth across all UK regions. Entrepreneurs in the Midlands were recently boosted by a new fund-raising campaign by Birmingham City Council that could generate as much as £3m to help launch new businesses in the city.
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