£400 million fund for business

Northern businesses can benefit from a new £400 million fund being managed by the Government-owned British Business Bank.

The bank has launched the Northern Powerhouse Investment Fund to boost the north of England's economy and help northern businesses, especially small and medium-sized firms with the potential to grow.

The bank is Government-owned but independently managed. The bank itself does not lend or invest directly. Instead it works with over 80 partner-organisations such as banks, leasing companies and venture capital funds.

Businesses apply for finance through a partner-organisation, which can lend and invest more because of their link to the bank.

A new report from the bank, called Spotlight: The Northern Powerhouse Investment Fund, says the north of England contributes £350bn per year in GDP, representing almost one fifth of the UK economy.

The new fund aims to build on this by providing smaller businesses with more choice of funding.

Based in Sheffield, the fund will work with 10 local enterprise partnerships (LEPs) and combined authorities, such as Greater Manchester Combined Authority which includes Rochdale Borough Council, growth hubs, accountants, fund managers and banks, to provide a mixture of debt and equity capital to firms at all stages of development.

Fund managers are offering micro-finance arrangements of £25,000 - £100,000, business loans of £100,000 to £750,000, and equity finance deals of up to £2million.

The funding covers areas across the North West, Yorkshire and Humber, and the North-East. LEPs bring together local authorities and businesses to help determine local economic priorities.

Greater Manchester-based Business Finance Solutions is one of the local organisations managing micro-finance agreements. FW Capital and Enterprise Ventures will manage business loans, and Maven Capital Partners and Enterprise Ventures will oversee equity finance.

Keith Morgan, chief executive at British Business Bank, said: "The north of England has a long and proud history of driving global innovation and economic progress. The region has more high-growth businesses than London and is larger than the economies of Greece, Denmark, Austria and Belgium."