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£660m Northern Powerhouse Investment Fund II preparing for 2024 launch

Press release 20 June 2023

British Business Bank invites proposals from potential fund managers to operate the new fund.

A £660 million investment fund to support the growth of small and medium-sized businesses across the North of England is on course to be launched early in 2024.

The Northern Powerhouse Investment Fund II is one of a series of new Nations and Regions Investment Funds being launched by the British Business Bank which will deliver a £1.6 billion commitment of new funding to drive sustainable economic growth.

The Northern Powerhouse Investment Fund II will offer a range of commercial finance options with loans from £25,000 to £2 million and equity investment up to £5 million. The new fund will cover the entire North of England including Greater Manchester, Liverpool City Region, Lancashire, Yorkshire & the Humber, Cheshire & Warrington, Cumbria, County Durham, Tyne & Wear, and Northumberland.

The fund will address an identified funding gap in the North of England and increase the supply and diversity of early-stage finance for smaller businesses. Similar funds are launching for the South West, Wales, Scotland and Northern Ireland, along with a follow-on fund for the Midlands.

The new fund builds upon the success of the regional investment funds already being delivered by the British Business Bank through the Northern Powerhouse (NPIF), Midlands Engine (MEIF) and Cornwall and Isles of Scilly (CIoSIF) Investment Funds.

Since the existing funds launched, the Bank has invested more than £648 million into NPIF, MEIF and CIoSIF. This investment has crowded in more than £1 billion in additional private sector co-investment and has supported more than 1,887 smaller businesses.

The launch of the Northern Powerhouse Investment Fund II builds on the success of its predecessor. It will further increase the supply and diversity of early-stage finance for smaller businesses in the region, providing finance for firms that might otherwise not receive investment and helping to break down barriers in access to finance.

The first Northern Powerhouse Investment Fund has facilitated the investment of more than £1 billion into northern businesses since it launched, and has been instrumental in the creation of thousands of new jobs and opportunities.

We know that the levels of private debt lending and equity investment in the North of England remain below expectations given the region’s share of the UK’s smaller business population and that is something this next generation of the fund will continue to address by backing ambitious businesses that will drive sustainable economic growth.

- Ken Cooper Managing Director, Venture Solutions, British Business Bank

The Northern Powerhouse Investment Fund II will operate across three tiers: smaller loans (£25K-£100K), debt (£100K-£2 million) and equity (up to £5 million).

Request for proposals from potential fund managers

The British Business Bank is now inviting proposals from potential fund managers to operate the Northern Powerhouse Investment Fund II via its website. It expects to appoint fund managers and launch the fund in early 2024.

Notes to editors

About the Nations and Regions Investment Funds and the Northern Powerhouse Investment Fund 2

The Nations and Regions Investment Funds will increase the supply and diversity of early-stage finance for UK smaller businesses, providing finance to firms that might otherwise not receive investment and help to break down barriers in access to finance. Operating in a commercially sustainable way the Nations and Regions Investment Funds will deliver a £1.6 billion commitment of new funding through investment strategies that best meet the needs of the businesses in their nation or region.

The British Business Bank is responsible for administering the Nations and Regions Investment Funds on behalf of the UK government. We are 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.

£660 million has been allocated to provide a new fund for businesses in the North of England, building on the Northern Powerhouse Investment Fund (NPIF). The Northern Powerhouse Investment Fund 2 will offer a range of commercial finance options with small loans from £25,000 and equity investment up to £5 million. The new fund will cover the entire North of England including Greater Manchester, Liverpool City Region, Lancashire, Yorkshire & The Humber, Cheshire & Warrington, Cumbria, County Durham, Tyne & Wear, and Northumberland.

The Northern Powerhouse Investment Fund 2 will have a demonstrable presence across the region linking up with the existing small business finance ecosystem to increase reach and create an impact beyond the funds, helping to boost productivity, innovation and jobs.

About the British Business Bank

The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to drive sustainable growth and prosperity across the UK and to enable the transition to a net zero economy, by improving access to finance for smaller businesses. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

The British Business Bank’s core programmes support over £12.2 billion 1  of finance to more than 96,000 smaller businesses 2 .

As well as increasing the supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of finance options available to smaller businesses. The British Business Bank Finance Hub provides independent and impartial information to businesses about finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success.

The British Business Bank is also responsible for administering the government’s three Coronavirus loan schemes and its Future Fund, together responsible for delivering £80.4 billion in finance to 1.67 million businesses. These schemes are now closed to new applications.

British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. Wholly owned by HM government, the Bank and its subsidiaries are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for the group can be found at British Business Bank.

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