The British Business Bank is on course to launch a £130 million investment fund this autumn, aimed at driving the growth of small and medium-sized businesses in Wales.
The Investment Fund for Wales is one of a series of Nations and Regions Investment Funds being launched by the British Business Bank which will deliver a £1.6bn commitment of new funding to smaller businesses across the UK. The fund 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 Wales, it aims to tackle an identified funding gap. Similar funds are launching in Scotland, Northern Ireland and the South West of England, along with follow-on funds for the Midlands and the North of England.
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 more than £629m into NPIF, MEIF, CIoSIF regions, and Northern Ireland, crowding in more than £963m in additional private sector co-investment and supporting over 1,825 smaller businesses.
Ken Cooper, Managing Director, Venture Solutions, at the British Business Bank, said:
“The new Investment Fund for Wales is designed to increase the supply and diversity of finance available to smaller businesses in Wales.
“Given the geographical spread of Wales’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.
“Levels of equity investment and also private debt lending are currently below Wales’s share of the UK’s small business population, so we’ll be working closely with the local finance ecosystem to ensure the fund provides support to innovative, ambitious business owners across the country.”
The Investment Fund for Wales will operate across three tiers: smaller loans (£25k-£100k), debt (£100k-£2m) and equity (up to £5m).
Request for proposals from potential fund managers
The British Business Bank is now inviting proposals from potential fund managers to operate the new Investment Fund for Wales via its website. It expects to appoint fund managers in summer 2023 ahead of launching in the autumn.
The British Business Bank is responsible for administering the Nations and Regions Investment Funds on behalf of the UK government. 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.