A £400 million investment fund to support Midlands SMEs is set to launch next year.
The Midlands Engine Investment Fund II (MEIF II) will be delivered by the British Business Bank, and will bring the total it invested in the region since 2017 to more than £700 million.
The support is part of the new Nations and Regions Investment Funds, launched by the British Business Bank, to drive sustainable economic growth and take investment outside the capital through debt and equity funds.
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MEIF II will operate across three tiers – smaller loans of £25,000-£100,000, debt (£100,000-£2 million) and equity (up to £5 million).
In the past few years the existing Midlands Engine Investment Fund has helped smaller businesses overcome challenges during the pandemic and supported regional economic growth, notably in innovation
The MEIF has invested more than £200 million into the Midlands and is reported to have supported the creation of more than 2,370 jobs across 595 Midlands businesses, and unlocked £301 million of private sector co-investment.
Ken Cooper, managing director of venture solutions at the British Business Bank, said: “This £400 million commitment to the Midlands Engine Investment Fund II builds on the success of the first Midlands Engine Investment fund, which has already supported nearly 600 innovative and ambitious businesses to access the funding they needed to grow.
"The new fund will further develop the region's economic prospects through an increase in the supply and diversity of early-stage finance for small businesses, providing finance for firms that might otherwise not receive investment and helping to break down barriers in access to finance.
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“The Midlands has a long history of entrepreneurship and by backing entrepreneurs and businesses with growth plans MEIF2 will have a positive impact on the region's economy. The businesses we back will be creating skilled jobs, fuelling green growth and introducing innovation in products and processes."
The British Business Bank is now inviting proposals from potential fund managers to operate the Midlands Engine Investment Fund II via its website, and expects to appoint fund managers by the end of 2023. The new fund is expected to launch next spring.
The Bank is establishing investment funds in areas not currently served by the Bank’s existing regional funding programme before launching follow-on investment funds in existing fund areas.