Launch of Investment Fund for Scotland provides £150m boost for small businesses

The British Business Bank is launching its new £150m Investment Fund for Scotland today (5 October), unlocking additional funding to help smaller businesses to prosper and thrive.

The fund will drive sustainable economic growth by supporting new and growing businesses across the whole of Scotland through investment strategies that best meet the needs of these firms. It includes a range of finance options with loans from £25,000 to £2m and equity investments up to £5m to help SMEs start up, scale up or stay ahead.

The Bank’s Investment Fund for Scotland will be the first solely UK government-backed investment fund for smaller businesses in Scotland, helping to increase the supply and diversity of early-stage finance by providing options to firms that might otherwise not receive investment.

Funding is designed to help businesses with activities including expansion, product or service innovation, new processes, skills development, and capital equipment.

Three fund managers have been appointed to manage the fund. DSL Business Finance will manage the smaller loans part of the fund (£25k to £100k), The FSE Group will be responsible for larger loans (£100k to £2m) and Maven Capital Partners will manage equity deals (up to £5m).

Louis Taylor, Chief Executive of the British Business Bank, commented: “With this fund for Scottish businesses, we hope to open the doors to new opportunities for a range of smaller firms looking to get started, grow, and develop across different sectors.

“We know that access to finance is a key concern for small businesses and are committed to ensuring that founders from all over the country have the same prospects in terms of finance, no matter where they are based.

“Scotland is a nation of entrepreneurs and innovators and recent success stories from spin-outs and early-stage businesses show that there is huge economic potential. We want to create local opportunities and generate an impact that spans beyond the fund, helping to boost productivity, innovation and employment.”

The Investment Fund for Scotland is the second in a series of six new Nations and Regions Investment Funds being launched by the British Business Bank and follows the launch of the South West Investment Fund in July. A total of £1.6bn has been committed to the new funds to drive sustainable economic growth and break down barriers in access to finance.

Scottish Secretary Alister Jack added: “This funding boost will be hugely important in giving smaller Scottish businesses the investment they need to grow. Scotland has some fantastic business success stories, and this new, additional fund will help create even more of them.”

By Matthew Neville – Senior Correspondent, Bdaily

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