A European fund devised to help North East businesses create jobs has helped regional companies secure £10m of funding since the start of the lockdown period.
More than £4m has been invested by the North East Fund – which was created with support from the European Regional Development Fund – in 25 companies since mid-March, which has helped to secure a further £6m of support from other investors.
The investments mean SMEs from different sectors are, in some cases, increasing sales and productivity in line with demand for their products and services.
North East Fund chief executive Jason Hobbs said: “These are hugely difficult times for the region’s businesses, and we expect the environment to remain challenging for some time to come.
“However, we’ve also seen glimmers of hope and a rise in demand for several of our investee companies’ products and services, like at Hive. We have done everything we can to keep funds flowing and support these businesses when they’ve needed investment to help serve their clients.
“The North East Fund was created with support from the European Regional Development Fund to provide growth capital for SMEs that could not secure the funding required from banks or private investors to finance their plans, and that is the role that we continue to fulfil here in the North East ecosystem.
“We unfortunately can’t provide the short term working capital or bridging loans that companies may need currently, but we and our fund managers can help companies to identify and access the most suitable government and local authority schemes.
“Our funds may be able to help those who receive Bounce Back or CBILs loans but need additional finance to sustain and then hopefully grow their business once again.
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“As we start to come out of lockdown, the North East Fund will continue to invest in start-up, early stage and more established businesses, and support those which are now meeting the changing needs of the economy.”
Investee company Hive, a provider of cloud-based employee feedback software, is one of several organisations which has seen a surge for its employee survey tools, real-time reporting features and staff engagement services.
The Newcastle firm, which has 52 staff, received a second round of investment in February through the Development Capital Fund and is now serving new and existing clients with an urgent need to communicate and engage with their staff remotely on all HR management issues as a result of Covid19.
Chief executive John Ryder said: “Despite the crisis, we’ve been lucky in that we’re one of those businesses that has actually created more opportunities due to the need for employee feedback right now.
“We’ve been able to rely on our agility and have developed additional features specifically for customers who have never had to communicate with people remotely before, or indeed, whose employees may ordinarily, have no access to work computers, like many blue collar workers.
“Dealing with major change, especially that which is forced upon us, is tough for anyone, and there is no easy route out of this for the region or indeed the country.
“However, all we can do is remain positive, keep moving forward together, adapt to the needs of our customers and embrace the new working environment.”