Aimed at small and medium-sized businesses throughout the United Kingdom, the Business Growth Fund has been launched as a way of supporting companies who have had problems raising investments as a result of the recession. Totalling 2.5billion, the money has been offered with the support of some of the largest banks in the country, who are enthusiastic about increased lending to small companies.
Long term loans of between £2million and £10million will be made available to businesses turning over £10million to £100million. Of course, this money doesn’t come free; the loan will buy a minority stake in the company and a place on the board of directors.
Chief executive of the Business Growth Fund, Stephen Welton, is positive about the developments, saying that it will allow businesses to add new products to their range, to look into working with developing markets and, perhaps most encouragingly, to create new jobs. ‘Companies of this size have often struggled to secure financing to support their growth plans,’ he says, ‘too big for start-up funding and too small to tap into larger commercial funding.’
The Fund is supported by major banks; HSBC, Lloyds, Barclays, Standard Chartered and RBS, it’s offices employ thirty people and are planning to build the business by opening offices in London and Edinburgh. Business Secretary, Vince Cable, will be attending the launch at the company’s head quarters in Birmingham, in the wake of the government’s decisions to bring forward the levy on bank’s balance records.
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Mr Cable commented that the BGF has been established to make large investments in small to mid-sized companies, giving promising firms the chance to expand. He spoke positively of the developments, saying; ‘To see the fund ready to invest so quickly is greatly encouraging and I look forward to the first successful firms receiving funding.’
Following Operation Merlin talks with the government, the banking industry frontrunners have agreed to increase lending to small businesses, in an effort to boost the ailing economy.
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