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£200 million South West Investment Fund preparing for 2023 launch

A £200 million investment fund to support the growth of small and medium-sized businesses across the South West of England – the South West Investment Fund – is on course to be launched in the first half of next year.

The fund is the first in 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 South West Investment Fund 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 South West region including Bristol, Cornwall and the Isles of Scilly, Devon, Dorset, Gloucestershire, Somerset and Wiltshire.

It aims to tackle an identified funding gap across the South West and increase the supply and diversity of early-stage finance for smaller businesses. Similar funds are in the planning stages for Wales, Scotland and Northern Ireland, along with follow-on funds for the Midlands and the North of England.

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

Since the existing funds launched, the Bank has invested more than £562 million into NPIF, MEIF and CIoSIF. This investment crowded in more than £849 million in additional private sector co-investment and has supported more than 1,715 smaller businesses.

Ken Cooper, managing director, venture solutions, at the British Business Bank, said: “The design of the South West Investment Fund builds on the success of our other regional funds. It will 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 levels of private debt lending and equity investment in the South West are significantly below what we would expect given the region’s share of the UK’s smaller business population. That’s something the new fund will tackle by backing ambitious businesses to drive sustainable economic growth.”

The South West Investment Fund will operate across three tiers: smaller loans (£25k-£100k), debt (£100k-£2 million) and equity (up to £5 million).

The British Business Bank is inviting proposals from potential fund managers to operate the new South West Investment Fund via its website.

It expects to appoint fund managers in the first quarter of 2023 and the South West Investment Fund is expected to launch in Spring 2023.

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

The Bank is 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.

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