North profits from state investment
State backed investments funds are becoming increasingly popular in the North of England, as SMEs search for loans and equity.
The FT reports that the loans are only available to companies in the North, or ones that agree to move there.
As Business Links grants become scarcer, the new funds can help businesses attract private sector business to areas that have been badly hit by the recession and public sector cuts.
In the North West, 971 SMEs applied for funding on the first six months of 2011. Receiving this money can also help businesses help secure deal with other lenders, who receive the reassurance of public sector to limit their risk.
However, the chief executive of North West Business Finance, believes that the loans are “finance on commercial terms,” and businesses coming to the region are bringing business there for other reasons – but finance is part of the attraction.
The finds are provided by the European Investment Bank, the European Regional Development Fund and the soon to be abolished regional development agencies. The money must be used by 2015, and any profits will be reinvested.
The North East Finance for Business has £125m to invest, and hopes to supports 850 businesses in the region.