Mercia Business Loans – which manages part of the Northern Powerhouse Investment Fund II (NPIF II) – has provided over £20m debt finance to regional businesses since the launch of the Fund two years ago.
In total 55 companies have secured NPIF II business loans from Mercia, the majority based in Yorkshire and Humber. The most common uses of funding have been to provide additional working capital to take on bigger projects, to invest in new equipment or technology, to support a move to larger premises or launch an additional site, or to fund a management buy-out as part of a wider growth plan.
Pete Sorsby, Fund Principal at Mercia Business Loans (pictured), said demand for funding had increased in the past few months as business confidence had increased, but conditions remained challenging. “It’s a tough climate for businesses, but there are still ambitious entrepreneurs who can spot an opportunity and want to press ahead. Hard times can also create buy-out opportunities, as incumbent management decide it’s time to bow out and make way for a younger, more energetic team.
“The Northern Powerhouse Investment Fund II aims to support business growth and fill any gaps in provision. While the banks are actively lending, they do have ‘hard’ credit policies and smaller firms in particular may fail to tick the right boxes. We are often able to help where the banks may be unable to do, or we can work alongside the banks to ‘top up’ any funding they provide.”
Companies receiving funding in recent months include Sheffield-based Play Padel, which will use it to open a second club in the city, and Leeds-based North Star Coffee Roasters which is expanding in the city centre. In Wakefield it has helped family-run store Land of Furniture to acquire its premises while in Hull, it has enabled GW Power-Safe to open new headquarters to showcase its work in renewables and it is helping East Yorkshire Hydraulics to boost growth following a management buy-out. The funding has also enabled indoor climbing operator Freeklime, which has centres in Huddersfield and York, to open a site in Lincoln.
Pete Sorsby added: “As companies grow they also take on new staff and many of the companies we support have their own training and apprenticeship schemes. The Northern Powerhouse Investment Fund II is helping businesses to create jobs, invest in skills and generate sustainable growth in communities throughout the North.”
Sarah Newbould, Senior Investment Manager at the British Business Bank, said: “Hitting this milestone highlights NPIF II’s continued commitment to providing finance to ambitious businesses across the North. Reaching this point is a strong refelction of the role the Fund is playing in supporting businesses to invest, grow and build for the future.”
The £660m Northern Powerhouse Investment Fund II (NPIFII) covers the entire North of England and provides loans from £25k to £2m and equity investment up to £5m to help a range of small and medium sized businesses to start up, scale up or stay ahead.
The purpose of the Northern Powerhouse Investment Fund II is to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the North of England. The Northern Powerhouse Investment Fund II will increase the supply and diversity of early-stage finance for the North’s smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance.