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 (NPIF 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.
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.
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.
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.
One of these is Nova Pangaea Technologies (NPT), a Teesside-based cleantech company that has created a revolutionary process, converting wood residues and agricultural waste into advanced biofuels which are then used to produce Sustainable Aviation Fuel (SAF), a crucial tool in the effort to decarbonise flight.
Securing £2.3m in 2019 and £900,000 the following year from the first Northern Powerhouse Investment Fund, NPT used the funding to help launch the operation of its demonstration facility and expand its senior leadership team. The funding has also provided the pathway to delivering its first first-of-a-kind commercial plant which will create a significant number of highly-skilled local jobs.
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 £2 million) and Praetura Ventures will manage equity deals (up to £5 million).
In Yorkshire and the Humber, Mercia will deliver debt finance (£100,000 to £2 million), as well as equity finance (up to £5 million) 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 £2 million) to North East businesses with Maven Capital Partners managing equity deals up to £5 million.
Following today’s official launch in Leeds, 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).
