Launch of the Midlands Engine Investment Fund
West Midlands businesses could benefit from greater access to finance
Three funds have been launched that can provide a combined £100million worth of equity investment to businesses in the Midlands. The finance will join the wider offerings of the Midlands Engine Investment Fund and promoted by the Secretary of State Sajid Javid on 22nd February 2018. It will join a wider range of financial solutions, including debt and small business loans offered through the fund, which was originally launched by the British Business Bank. It builds on a wider package of £1 billion of funding provided by the British Business Bank offered to growing SMEs in the Midlands.
Mr Javid said: “The Midlands Engine already boasts over 14 per cent of the UK’s high-growth businesses and its economy is worth more than £230 billion – larger than countries like Denmark. We want to harness its huge potential and help give small firms across the Midlands that much needed boost to grow their business. Ensuring every part of the UK can play to its strengths and spread prosperity is central to our Industrial Strategy and this fund will not only generate jobs to benefit the entire Midlands but, ultimately, the British economy.”
The fund will aim to meet a well recognised gap in the business market; finance available for micro and small businesses to grow and meet their potential. Although this sector employs around 60% of all private sector employees in the UK, they are often unable to attract finance. Traditionally this was known as the ‘MacMillan Gap’ where businesses aiming to borrow between £0-£150,000 to meet their liquidity requirements, have been ill served by the traditional financial system. In Germany, there is a network of publicly owned business banks that aim to meet the financial needs of regional SMEs. The development of the British British Bank is hoped by some to be the first step in developing a similar system in the UK to support small businesses. It is hoped it will provide small business loans, small business finance and small business credit, within the West Midlands.
Credex is developing a innovative lending platform that will hope to provide businesses a complementary solution. It will offer zero interest credit that can be spent with regional businesses and used to support business grow. It is hoped that once we have proven the model, Credex will one day sit along the wider financial offers available to businesses in the West Midlands. We don’t believe there is one magic bullet to the lack of finance available business in the West Midlands. But we do believe that all options should be explored. Follow our progress through reading our Company Updates.