Mercia passes £20 million lending milestone

A business lender has passed a £20 million funding milestone after backing dozens of SMEs across the North of England over the past two years.

Mercia Business Loans, which manages part of the £660 million Northern Powerhouse Investment Fund II (NPIF II), has provided debt finance to 55 businesses since the fund launched, with the majority based in Yorkshire and the Humber.

Funding has supported businesses with working capital, new equipment and technology, larger premises and additional sites, as well as management buyouts linked to growth plans.

Recent recipients include Sheffield-based Play Padel, which is opening a second club in the city, and Leeds-based North Star Coffee Roasters, which is expanding in the city centre.

In Wakefield, family-run Land of Furniture has used funding to acquire its premises, while Hull-based GW Power-Safe has opened a new headquarters showcasing its renewable energy work.

Support has also helped East Yorkshire Hydraulics pursue growth following a management buyout and enabled indoor climbing operator Freeklime, which has centres in Huddersfield and York, to expand into Lincoln.

Mercia says demand for finance has increased in recent months alongside improving business confidence, although trading conditions remain challenging.

Pete Sorsby, fund principal at Mercia Business Loans, said: “It’s a tough climate for businesses, but there are still ambitious entrepreneurs who can spot an opportunity and want to press ahead. 

“Hard times can also create buy-out opportunities, as incumbent management decide it’s time to bow out and make way for a younger, more energetic team. 

“The NPIF II aims to support business growth and fill any gaps in provision.  

“While the banks are actively lending, they do have ‘hard’ credit policies and smaller firms in particular may fail to tick the right boxes. 

“We are often able to help where the banks may be unable to do, or we can work alongside the banks to ‘top up’ any funding they provide.”

NPIF II provides loans ranging from £25,000 to £2 million and equity investment of up to £5 million.

Covering the entire North of England, the fund aims to increase access to early-stage finance, support innovation and help smaller businesses start and scale.

Pete added: “As companies grow they also take on new staff and many of the companies we support have their own training and apprenticeship schemes. 

“The NPIF II is helping businesses to create jobs, invest in skills and generate sustainable growth in communities throughout the North.”

Sarah Newbould, senior investment manager at the British Business Bank, added: “Hitting this milestone highlights NPIF II’s continued commitment to providing finance to ambitious businesses across the North. 

“Reaching this point is a strong reflection of the role the Fund is playing in supporting businesses to invest, grow and build for the future.”

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