The Chancellor has announced a new £400m allocation for a new Midlands Engine Investment Fund to be delivered by the British Business Bank, bringing the total for investment in the region to over £700m.
This announcement represents a significant commitment by the Government to support access to finance in the Midlands where we know there has been market gaps. This next generation of the MEIF will deliver significant scale growth capital for business through the set-up of a new fund providing debt and equity to firms in the region.
An additional £50m has been allocated to the current MEIF programme to take it to £300m, ensuring continuity of funding whilst the next generation of MEIF becomes operational and funds are made open to investment.
This builds on the success of the existing regional funds in operation since 2017, which have helped address market gaps in access to finance and are demonstrably effective in driving regional economic growth, through supporting the creation of high-paying high productivity jobs, upskilling existing workforces, and supporting the scaling up of regional businesses. In 2020, the Midlands Engine Investment Fund was responsible for 25% of all equity deals in the Midlands.
The current MEIF fund has invested £142m in Midlands SMEs since launch in 2017. Its investments have helped leverage a further £150m of additional private sector funds into these businesses and is forecast to create more than 3,800 jobs.
The new fund is HMG funded and its design is subject to consultation with local stakeholders.
Catherine Lewis La Torre, CEO of British Business Bank, said: “The Chancellor’s announcement is a clear and welcome show of support for the Midlands’ most ambitious and innovative businesses and the success of the MEIF to date. Since launching in 2017, the MEIF has helped more than 460 businesses invest, innovate, grow and create jobs.
“Today’s commitment of a further £400m through the next generation of MEIF demonstrates the Government’s resolve in supporting the Midlands economy and ensuring the region’s business community has access to the right finance, at the right time.
“There is a strong sense of momentum and ambition in the Midlands right now. The region’s businesses are looking to come back stronger and push forward with growth plans. These funds will continue to support innovation, expansion and the creation of high value jobs.”
Sir John Peace, Chairman, Midlands Engine, said: “I am delighted that the government has committed this significant level of investment to support Midlands business growth – particularly SME growth in our region.
“SMEs are the backbone of our dynamic Midlands economy – and for too long there have been barriers around access to appropriate finance for growth for ambitious firms.
“We are a region of entrepreneurs and truly ambitious businesses – that can, and do, compete on the global stage as well as deliver high quality jobs and the products and services our nation needs. As we look to build an ever-stronger UK economy and act powerfully in global markets, access to financial support for development and innovation, and for expansion, including reaching new markets, is critical.
“Midlands firms stand ready to accelerate our economic growth, given the tools they need – and in fact, they are already delivering tangible impact and driving recovery.
“Finance for growth is simply essential which is why I am pleased to see Government backing our business community with the confirmation of this investment today.”
Jon Corbett, Chair of the MEIF Strategic Oversight Board, added: “The Government’s commitment to a second MEIF offering £400m to the region’s growing businesses is not only reflective of the success of the MEIF to date, but a clear commitment to support those businesses that have the potential to stimulate the local economy, create jobs and help the region realise its potential in transitioning to a net zero economy.
“The MEIF supports firms that not only boost our regional economy but contribute to our goal to create a sustainable and greener economy.
“I look forward to working with our partners to back those who are at the forefront of the Midlands Green revolution.”
The next generation of MEIF is a key part of the Government’s commitment to Levelling Up the UK economy and overcoming regional imbalances, specifically in access to finance for SMEs. Working with the Midlands Engine, the West Midlands Combined Authority and Local Enterprise Partnerships, fund managers and the business community, the MEIF will continue to broaden funding options and opportunities available to Midlands businesses.
The first MEIF was launched in 2017 to nurture regional entrepreneurship by providing investment and support for small businesses. It has so far delivered over £292m (including private sector investment) across 648 investments into over 460 SME’s.