Hundreds of jobs could be on the way for North East

An extra £20m could be on its way to a North East development fund, helping to generate hundreds of jobs.

North East Finance, launched to fast-track business growth in the region, are in detailed negotiations with Department of Communities and Local Government (DCLG) officials managing the European Regional Development Fund (ERDF) to secure the additional money to allow the programme to continue investing through to December 2015.

It already manages the £125m Finance for Business North East programme, and if the deal is confirmed, the cash is expected to support around 75 businesses and create or safeguard 500 jobs across the North East.

A decision is expected later this year.

The talks come after North East Finance and the North East Local Enterprise Partnership secured £7.5m from the Regional Growth Fund to boost the resources available to small and medium-sized companies in 2015.

Andrew Mitchell, chief executive of North East Finance, said: “The additional ERDF money would be a fantastic boost for SMEs and would help stimulate business and employment growth at a time when the region really needs it. It would also leverage in many millions of pounds of private sector investment, creating further wealth and jobs.

“The current Finance for Business North East (FFBNE) programme was due to close its doors in December 2014, but this additional commitment from the Regional Growth Fund and ERDF would allow us to continue investing in businesses for a further 12 months.

“Crucially, any extension of the current programme to the end of 2015 would allow the two LEPs and other partners to put in place long-term investment programmes to follow the FFNBE programme and ensure continued availability of investment capital through to the end of the decade and beyond.”

Jeremy Middleton, board member of the North East LEP, said: “Coming on the back of the £7.5m Regional Growth Fund money won by the North East LEP to extend the Finance for Business programme, this additional match funding would be a huge boost to businesses that are seeking equity finance or are struggling to secure loan investment from traditional sources. Talks to secure the funds have been very positive and I’m confident of a successful outcome.”

Stephen Catchpole, managing director of Tees Valley Unlimited – the Tees Valley LEP – said: “The Finance for Business North East fund has already pumped millions of pounds into dozens of Tees Valley companies. We welcome attempts to secure the additional investment, which would be a catalyst for further economic growth in the area.”

The FFBNE fund (also known as the JEREMIE programme) is the most successful of its type in the UK. Since its launch in 2010, it hasprovided debt and equity funding to more than 500 SMEs, creating or safeguarding around 2,500 jobs. Investments have been made in companies across a wide range of sectors, including bio-technology, manufacturing, engineering and renewable energy.

Backed by cash from the European Regional Development Fund (ERDF) and the European Investment Bank (EIB), the scheme is on track to support 850 businesses, create more than 5,000 jobs and safeguard a further 2,800 jobs by the end of next year. It has benefited a host of firms from micro businesses and start-ups to fast-growth medium-sized enterprises.

As well as providing £75m of direct investment to local companies, the programme has secured more than £85m of private sector cash to support deals from venture capital firms, business angels and other investors.