The government-backed British Business Bank launches the first £120m tranche of its new Midlands Engine Investment Fund today.
The British Business Bank has today announced the first wave of its £250m Midlands Engine Investment Fund, with the launch of £120m worth of SME debt finance, in a move designed to provide greater support to the region’s smaller businesses, accelerate economic growth and promote job creation – in line with the government’s Midlands Engine strategy.
The fund’s launch has been marked with the publication of a new report on the current state of the regional economy and funding landscape. Spotlight: The Midlands Engine Investment Fund, draws on the British Business Bank’s own research together with other publicly-available data. It highlights the opportunities for ambitious, fast-growth businesses across the Midlands Engine area to reach their economic potential.
The report highlights how the MEIF will unlock the potential of the region’s small businesses, while detailing the current economic strengths and parameters of the region:
- The Midlands economy contributes 13% of the UK’s economic output
- 14% of all high-growth businesses are located in the region
- Five-year business survival rate is higher in the East and West Midlands than in London
The Midlands Engine Investment Fund will play a vital role in fuelling regional growth. It is the result of close collaboration between the British Business Bank, the Department for Business, Energy and Industrial Strategy, the Department for Communities and Local Government and 10 Local Enterprise Partnerships (LEPs) in the East & South East Midlands and West Midlands. It brings together new and existing funding from Central Government, the European Regional Development Fund (ERDF), British Business Bank and European Investment Bank (EIB).
The £120m fund is composed of two separate lots - £30m of small business loans valued at £25,000 to £150,000, as well as £90m of debt finance worth £100,000 to £1.5m. The £120m fund is part of a wider £250m commitment, with further funding to be made available in due course.
Sajid Javid, secretary of state for communities and local government and Midlands Engine ministerial champion said: “The investment fund is a key part of our Midlands Engine Strategy to help create more jobs and boost skills in the region. This financial support will enable local businesses to grow, move in to new markets and boost productivity.”
Greg Clark, secretary of state for business, energy and industrial strategy, commented: “The UK is a world leader in business and innovation. This is why we want all corners of the country to experience the benefits of enterprise, growth and jobs created by new businesses.
"The Midlands Engine Investment Fund is an important part of our modern Industrial Strategy, which will help entrepreneurs across the thriving Midlands region access the funding and support they need to start, grow and invest in their future.”
Patrick Magee, chief commercial officer at the British Business Bank said: “The MEIF will play a pivotal role in plugging in the gaps currently present in the small business funding landscape, ensuring that all businesses have access to the finance they need to grow.
"Currently, younger small businesses and those looking to scale up, the very businesses that have the greatest potential for job creation, are more likely to have their applications for external finance rejected. We want to mobilise these businesses, supporting organisations of varying sizes and stages of development across the Midlands.”
The Midlands Engine Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.