Growth Fund-backed SMEs generate extra £26.8m for North East economy

Firms backed by the Finance for Business North East Growth Fund have generated an additional £26.8m in capital investment for the region’s economy, research shows.

According to data from NEL Fund Managers, companies in receipt of finance from the £30m pot have leveraged it to secure further support for expansion and job creation.

NEL made 146 investments through the North East Growth Fund from 2010 to 2017, supporting growing regional firms with an average of £205k per investee.

Of the companies backed, 29 secured at least one further follow-up Growth Fund investment with NEL, which has already received more than £25m in financial returns.

The fund is currently on track to generate a healthy return on investment, NEL said, and cash generated will be reinvested into North East firms.

The Growth Fund was aimed at growing companies based anywhere in the North East. It was established with a mission of creating 1,500 new jobs and safeguarding 1,300 more.

NEL is responsible for the £9m North East Small Loan Fund and the £18m North East Growth Capital Fund – two of the five funds making up the new £120m North East Fund Supported By The European Regional Development Fund.

Dr Yvonne Gale, chief exec of NEL Fund Managers, said: “Our investments are designed to have a tangible impact on both the businesses with which we work and the wider regional economy.

“Helping these firms leverage their ideas and resources as far as possible, and so create further sustainable employment, supply chain spending and commercial success, is very much part of that process.”

She continued: “A ready supply of investment capital is crucial to the long-term well-being of any economy, and the demonstrable wider impact that this research highlights reflects well on the quality of the regional management teams and business plans that we’ve supported.

“Our continuing mission is to help more ambitious companies realise even more of their potential by providing them with the investment capital they require to take their next steps forward.”