The British Business Bank (BBB) is in the process of recruiting a cohort of investment managers to operate the SME Investment Fund for Scotland.
It is hoped that fund managers will be appointed by Spring 2023, ahead of the fund’s launch later in the year.
£150 million will be made available to small businesses in Scotland, as part of a series of regional investments issued by the BBB.
The fund seeks to issue up to £1.6 billion to small businesses across the UK, to help plug the funding gap for British SMEs.
Funding for Small Businesses Across the UK
Established in 2014, the BBB is the UK government’s state-owned, economic development bank.
The new initiative follows in the footsteps of similar regional investment funds launched by the BBB.
Across 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), the BBB have invested upwards of £605 million, supporting over 1,600 small businesses.
The Department for Business, Energy and Industrial Strategy, which oversees the bank’s operations, is focused on creating investment funds in areas currently not served by existing regional funding initiatives for small businesses.
The SME Investment Fund for Scotland will provide three tiers of business funding: loans, debt, and equity.
“The new Investment Fund for Scotland builds on the success of the Bank’s existing regional funds and is designed to increase the supply and diversity of finance available to smaller businesses in Scotland” said Ken Cooper, Managing Director of Venture Solutions at the British Business Bank.
He continued: “Our aim is to reduce imbalances and break down barriers that small firms may face in accessing finance, creating a more level playing field.
“Given the geographical spread of Scotland’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.
“While we have seen an encouraging stream of equity deals into Scottish firms over the past couple of years, the overall levels of equity investment and private debt lending remain much lower than Scotland’s share of the UK’s small business population.
“We’ll be working closely with the local small business finance ecosystem to ensure the fund provides support to innovative, ambitious business owners across the country.”
Small businesses access unsecured, fast funding from Got Capital. As an alternative lender, Got Capital offers financing solutions specifically designed for and catered to the needs of SMEs.
