The British Business Bank has launched its new Northern Powerhouse Investment Fund II, a £660m fund set to cover the entire North of England.

The Northern Powerhouse Investment Fund II aims to build on the success of the initial fund, with the purpose of driving sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the North.

Providing loans from £25k to £2m and equity investment up to £5m, the Fund will continue investing into companies operating within the North West, Yorkshire and the Humber and Tees Valley.

It is now expanded to include the whole of the North East enabling businesses across the whole of the North to access the Fund to start up, scale up or continue on their growth journey.

The Northern Powerhouse Investment Fund II will increase the supply and diversity of early-stage finance for Northern smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance.

Since the launch of the first Northern Powerhouse Investment Fund in 2017, over £1bn of direct and private sector co-investment has been facilitated to businesses.

£660m Northern Powerhouse Investment Fund II to be launched

Nine fund managers have been appointed to manage the Northern Powerhouse Investment Fund II. In the North West, GC Business Finance & River Capital will manage the smaller loans part of the fund (£25,000 to £100,000), FW Capital will be responsible for larger loans (£100,000 to £2m) and Praetura Ventures will manage equity deals (up to £5m).

In Yorkshire and the Humber, Mercia will deliver debt finance (£100,000 to £2m), as well as equity finance (up to £5m) to smaller businesses with Business Enterprise Fund (BEF) delivering smaller loans between £25,000 and £100,000.

With NPIF II now set to cover the entire North East, NEL Fund Managers (NEL) will  provide both smaller loans (£25,000 to £100,000) and debt finance (£100,000 to £2m) to North East businesses with Maven Capital Partners managing equity deals up to £5m.

David Foreman, managing partner and co-founder at Praetura Ventures, said: “This is a huge day for us – and hopefully for North West founders.

“Today, Praetura and British Business Bank launch the £100m Northern Powerhouse Investment Fund II – Equity North West.

“We’ve been working towards this for an insanely long time and we want to make this a real game-changer for companies in the North West of England.

“I’d like to thank every single person and organisation that has helped and supported us throughout the awesome startup community in Manchester, Liverpool, Lancaster and the entire North West.”

Gary Guest, fund director at FW Capital, said: “Access to finance can be a barrier to growth for many businesses which may have insufficient assets to support loans from traditional lenders and it is here where NPIF II can make a real difference. We can’t wait to get started delivering the fund and driving innovation, growth and job creation in areas where such investment is critical.”

Michael Vassallo, investment director of  Maven, said: “The North East  already has a thriving ecosystem for ambitious companies, and the new fund underscores our commitment to supporting the growth and development of SMEs from Northumberland to Teeside.”

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 benefitted the whole of the Northern economy.

“This is why it was important to continue the Northern Powerhouse Investment Fund into its next phase. 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.”

The British Business Bank will be holding a roadshow of events for small business finance intermediaries across the region to provide more information about the Fund. Destinations include Newcastle (18th April); Manchester (24th April), Sheffield  (30th April).

Further dates for roadshow events in Liverpool, Hull, Lancashire, Tees Valley, York, Cheshire, Durham, Cumbria and Northumberland will be announced shortly.

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