A new £40 million entrepreneur fund, designed to enable the rapid growth of scale-up businesses, has been announced by small business minister Margot James.
The fund, supported with £26 million from the government-owned British Business Bank, is the 21st of its kind and will be ran by Active Private Equity, who specialise in helping customer-focused businesses grow.
Margot James made the announcement in Manchester during the Scale-Up Institute’s regional economic growth programme, which brings together Local Enterprise Partnerships, Growth Hubs, business schools and entrepreneurs to help drive local growth.
Ms James said: “Small businesses are at the heart of our economy and the whole country benefits when they grow and create jobs for people.
“British Business Bank is helping more than 48,000 businesses with over £3.1 billion of support, much of it going to those with high-growth potential.”
The entrepreneur fund was announced as the minister met with entrepreneurs in the Midlands and north-west, where she went on to visit three different organisations in Manchester which all support small and medium sized enterprises (SMEs) and provide high-tech work spaces and support for start-ups looking to scale up and grow.
Richard Heggie, head of high growth & entrepreneurs at Barclays welcomed the commitment and says it “demonstrates further Government support for UK scale ups.”
Barclays has recently announced the extension of its venture debt fund for UK technology firms to £200 million, as part of its commitment to fund innovative scale-ups.
Since launching in May last year, the bank has provided £100 million in earlier stage financing to support to nearly 40 companies.
The Barclays High Growth Fund is designed to provide access to debt finance, an alternative to selling equity, enabling entrepreneurs to retain control of development and concentrate instead on accelerated growth.
Debt finance is commonly available in the US, but conventionally unavailable to UK businesses, meaning fast growing businesses of this type have traditionally struggled to gain sufficient financing.
Mr Heggie said: “Our research shows that the number of high growth business fell last year and we are determined to do everything we can to ensure fast growing businesses don’t miss out, which is why we are extending our own High Growth fund for scale ups to £200million.
“By backing brave entrepreneurs who in turn create jobs and add valuable skills to the UK economy, we can champion future innovators.”