British Business Bank seeks £150m fund operators
The British Business Bank is inviting proposals from managers to operate a £150 million SME Investment Fund for Scotland.
It expects to appoint operators in the Spring ahead of launching the fund in the summer as one of a series of being launched by the bank to provide a £1.6 billion to smaller businesses across the UK.
The fund was announced in October 2021 by Rishi Sunak during his time as Chancellor and will offer a range of commercial finance options with loans from £25,000 to £2m and equity investment of up to £5m.
By increasing the supply and diversity of early-stage finance for smaller businesses in Scotland, it aims to tackle an identified funding gap.
The new funds follow the success of the regional investment funds already being delivered by the British Business Bank through the Northern Powerhouse Investment Fund (NPIF), Midlands Engine Investment Fund (MEIF), Growth Finance Fund (NI) and Cornwall and the Isles of Scilly Investment Fund (CIoSIF).
Since the existing investment funds launched, the Bank has invested over £605m into the areas covered by NPIF, MEIF, CIoSIF, and NI, crowding in over £825m in additional private sector co-investment and supporting over 1,650 smaller businesses.
The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to drive sustainable growth and prosperity across the UK, and to enable the transition to a net zero economy.
Ken Cooper, managing director, venture solutions, at the British Business Bank, said: “The new Investment Fund for Scotland builds on the success of the Bank’s existing regional funds and is designed to increase the supply and diversity of finance available to smaller businesses in Scotland.
“Our aim is to reduce imbalances and break down barriers that small firms may face in accessing finance, creating a more level playing field.
“Given the geographical spread of Scotland’s smaller business population, connecting with entrepreneurs in some of the more rural and hard-to-reach areas will be an important focus of the fund.
“While we have seen an encouraging stream of equity deals into Scottish firms over the past couple of years, the overall levels of equity investment and also private debt lending remain much lower than Scotland’s share of the UK’s small business population.
“We’ll be working closely with the local small business finance ecosystem to ensure the fund provides support to innovative, ambitious business owners across the country.”