Objective

Identify and help to reduce regional
imbalances in access to finance for smaller businesses across the UK

There continue to be regional disparities, particularly in the availability of equity and higher risk debt investment. These are further exacerbated by a lack of awareness and confidence among smaller businesses seeking finance, especially those
outside London and the South East.

Objective

Identify and help to reduce regional
imbalances in access to finance for smaller businesses across the UK

There continue to be regional disparities, particularly in the availability of equity and higher risk debt investment. These are further exacerbated by a lack of awareness and confidence among smaller businesses seeking finance, especially those
outside London and the South East.

This means that businesses in these regions, and by extension these regions’ entire economies, potentially miss out on growth opportunities.

​Regional funds

The Bank has three regional investment funds focused on specific areas of the UK – the Northern Powerhouse, Midlands Engine, and the Cornwall and Isles of Scilly Investment Funds. In addition, in 2018/19, we invested for the first time in a fund dedicated to Northern Ireland.

Northern Powerhouse Investment Fund

We celebrated the second anniversary of the £400m Northern Powerhouse Investment Fund (NPIF) in February 2019. The fund has supported £203m of finance for local smaller businesses, including £99m from the private sector.

Midlands Engine Investment Fund

In its first year the £250m Midlands Engine Investment Fund (MEIF) invested £41m through debt and equity funds of which £17m came from the private sector.

Cornwall and Isles of Scilly Investment Fund

The Bank, working alongside the Cornwall and Isles of Scilly Local Enterprise Partnership, launched the £40m Cornwall and Isles of Scilly Investment Fund (CIoS) in June 2018. The first loan from the fund was made in December 2018, and the first equity investment in January 2019.

Northern Ireland

December 2018 saw the launch of the Bank’s first fund focusing exclusively on supporting small businesses in Northern Ireland. The £30m fund comprised a £10.5m investment from the Bank, £7.5m from Invest Northern Ireland, and £12m from the private sector.

case study

Locate Bio

Maps Nottingham

Fund Manager: Mercia Technologies

Programme: Midlands Engine Investment Fund

Locate Bio Ltd is a cell and gene within MediCity in Nottingham.

Following the appointment of Nick Staples as the new CEO in late 2018, the company sought funding to expand into the fast growing cell and gene therapy field, utilising its next generation proprietary technologies.

It received a £2m investment from Mercia Technologies, with £400k provided from the Midlands Engine Investment Fund. Locate Bio used the funding to help develop its current pipeline of high value bone fusion programmes, to further develop its IntraStem non-viral gene therapy technology, and employ six more team members.

case study

Case study

Sign Solutions

Maps Redditch

Fund Manager: Midven

Programme: Midlands Engine Investment Fund

Sign Solutions, specialists in providing high quality communication support services for Deaf and hard of hearing individuals in the public and private sector, secured investment from venture capital firm Midven, through the Midlands Engine Investment Fund.

Historically focused on the provision of face-to-face interpreters, BSL translations and training, Redditch-based Sign Solutions was founded in 1998 and provides all types of interpretation services, for deaf people nationwide, 24 hours a day, seven days a week, 365 days a year.

Sign Solutions aims to use its current reputation as one of the market leaders in this field to conquer the rapidly growing video interpreting market. With Midven’s investment, seven jobs will be created at Sign Solutions over the next two years, with further plans to invest in developing its service and make it available in new areas.

Case study

New programmes for the regions

In 2018/19, the Bank launched two new initiatives under this objective. These were:

  • a £100m Regional Angels programme (October 2018)
  • a UK Network (autumn 2018).
Regional Angels programme

Angel investors play a vital role in the economy: they bring patient capital, business experience and skills to support the growth of smaller businesses. However, The Treasury’s consultation – ‘Financing growth in innovative firms’, highlighted continuing difficulties for businesses in accessing earlier stage capital in some parts of the UK. Our new Regional Angels programme is designed to help develop clusters of angels outside of London and the South East.

In 2018/19 we received a broad regional spread of interest in the programme, with a varied set of investors including angel networks and syndicates, equity platforms, and angel funds and managers. We expect to make our first transactions through the programme in early 2019/20.

UK Network

Our UK Network was launched in autumn 2018. This was a major step for the Bank, meaning for the first time we have a geographically dispersed field-based team, with each team member focused on the smaller business finance markets of their particular region. The network will help the Bank to understand and improve finance markets at regional and sub-regional levels.

Over the relatively short period of time that the UK Network has been running, it has held more than 800 meetings with smaller businesses and their intermediaries, presented at over 50 external events, and attended 150 more. The network will use the information and insight it gains from these meetings to inform the Bank’s ongoing regional strategy, and to identify opportunities to improve collaboration and co-ordination within and across regions. It also provides us with a way to promote our smaller business-facing products such as the Finance Hub and the Business Finance Guide.

Case study

Kalopsia Collective CIC

Maps Edinburgh

Programme: Enterprise Finance Guarantee

Edinburgh based Kalopsia is a social enterprise batch textile manufacturer.

Founded in 2012, it creates white label goods with the aim to produce ethical and sustainable commercial products. In 2018, it received funding through Scottish Enterprise Finance Guarantee partner DSL Business Finance to expand its number of employees and equip the business with additional machinery.

Case study

At a glance

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