The British Business Bank has launched the Northern Powerhouse Investment Fund II (NPIF II), a £660m fund set to boost SMEs in the north of England.
The NPIF II aims to boost early-stage finance for small businesses across the north of England, providing funds to firms that might otherwise be overlooked, helping to break down barriers in access to finance.
Building on from the success of the original 2017 NPIF, which saw over £1bn of direct and private sector co-investment provided to businesses, the newest initiative looks to build on its success.
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 benefited the whole of the Northern economy.”
As part of the initiative, the fund will offer loans ranging from £25,000 to £2m and equity investments up to £5m and has recently extended its support to businesses across the whole of the North East. This expansion ensures that companies throughout the region can use the Fund to kickstart, expand, or sustain their growth plans.
Taylor added: “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.”
Nine fund managers have been selected to oversee the operations of the NPIF II. In the North West region, GC Business Finance and River Capital will handle smaller loans ranging from £25,000 to £100,000, while FW Capital will manage larger loans from £100,000 to £2m and Praetura Ventures has been tasked with managing equity deals of up to £5m
In Yorkshire and the Humber, Mercia will oversee debt finance ranging from £100,000 to £2m, along with equity finance up to £5m for smaller businesses. Meanwhile, the Business Enterprise Fund (BEF) will be responsible for providing smaller loans ranging from £25,000 to £100,000.
Expanding to include the entire North East, NEL Fund Managers (NEL) will offer both smaller loans ranging from £25,000 to £100,000, as well as debt finance ranging from £100,000 to £2m to businesses in the region. Additionally, Maven Capital Partners will oversee equity deals of up to £5m.
Kevin Hollinrake MP, Minister of State for Enterprise, Markets, and Small Business, 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.”
This initiative comes at a crucial time for SMEs in the UK, earlier this year the Bibby Foreign Exchange (BFX) published its 2024 Trading Places report, which highlighted that a significant number of the UK’s small businesses are struggling with rising inflation and barriers caused by Brexit.
Following its launch, the British Business Bank has announced a roadshow of events to provide more details for SMEs throughout the region.
Initial destinations include Newcastle on 18 April, Manchester on 24 April, and Sheffield on 30 April, with additional roadshow events to be announced soon in Liverpool, Hull, Lancashire, Tees Valley, York, Cheshire, Durham, Cumbria and Northumberland.
Hollinrake concluded: “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.”
