The £400m Northern Powerhouse Investment Fund, which is designed to boost small and medium-sized enterprises (SMEs) across the North and help them realise their growth potential, has launched.
"The Northern Powerhouse Investment Fund will unlock the unparalleled innovation, talent and entrepreneurial spirit of the North and build on the world class strengths of the region."
The British Business Bank is behind the NPIF, with the initiative set to work with ten local enterprise partnerships (LEPs), combined authorities and growth hubs – as well as accountants, fund managers and banks – to provide a mix of debt and equity capital.
The scheme, which will be based in Sheffield, will make cash available to fund managers offering microfinance (£25,000 - £100,000), business loans (£100,000 - £750,000) and equity finance (up to £2m).
Leeds city centre
Initially announced in November 2015, the launch of the NPIF comes on the back of the British Business Bank's recent Spotlight: The Northern Powerhouse Investment Fund reported which suggested the North contributes £350bn per year in gross domestic product (GDP) – close to one fifth of the UK economy.
It is hoped the fund builds on this foundation by providing smaller businesses with an increased choice of funding and producing greater levels of investment across the Northern Powerhouse.
Keith Morgan, chief executive at the British Business Bank, said: "The region has enormous untapped economic potential that can be realised by improved funding options and opportunities.
The Transporter Bridge, Teesside
"The Northern Powerhouse Investment Fund represents a co-ordinated policy approach to help realise this potential across the North."
Andrew Percy, Northern Powerhouse minister, added: "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.
"The region has enormous untapped economic potential that can be realised by improved funding options and opportunities."
"This dedicated £400m will help us go even further, supporting smaller businesses across the region to reach their full potential and helping to create an economy that works for everyone."
The project is supported financially by the European Union, with the NPIF to combine capital allocated to the ten LEPs in the North West, Yorkshire and Humber and the Tees Valley by the European Regional Development Fund, a loan from the European Investment Bank, funding from the Department for Business, Energy and Industrial Strategy, and an additional loan from British Business Finance.
MediaCityUK, Greater Manchester
Jonathan Taylor, vice president of the European Investment Bank, said: "The Northern Powerhouse Investment Fund will unlock the unparalleled innovation, talent and entrepreneurial spirit of the North and build on the world class strengths of the region."
The fund managers appointed to manage the Northern Powerhouse Investment Fund are:
- Microfinance: Business Finance Solutions, MSIF, Finance for Enterprise and Business Enterprise Finance
- Business Loans: FW Capital and Enterprise Ventures
- Equity Finance: Maven Capital Partners and Enterprise Ventures
Although the Northern Powerhouse Investment Fund will cover the whole of the North West and Yorkshire, it will only finance North East businesses based in the area covered by the Tees Valley Unlimited LEP, with a separate £120m fund being run by the North East LEP.