Sean Hutchinson, Senior Investment Manager at the British Business Bank discusses the different ways in which businesses across the North can access government funding in order to weather the uncertain market.
COVID-19 has caused profound disruption across the global economy, but businesses will find it easier to navigate their way through this tough period with the right support. The Northern Powerhouse Investment Fund (NPIF) is committed to helping businesses through this challenging period, and we are delighted to announce that six of our Fund Managers are now accredited to deliver NPIF loans backed by the Coronavirus Business Interruption Loan Scheme (CBILS)
The Coronavirus Business Interruption Loan Scheme, managed by the British Business Bank, is one of the initiatives put in place to provide financial support to SMEs across the UK that are seeing a disruption to their cashflows as a direct result of COVID-19.
Other British Business Bank loan guarantee schemes designed to support businesses during the coronavirus outbreak are the Bounce Back Loan Scheme (BBLS), which enables businesses to access smaller loans more quickly, and the Coronavirus Large Business Interruption Loan Scheme (CBILS) for larger businesses with more significant funding requirements.
More recently, the new Future Fund which opened for applications on the 20th May 2020 will support innovative UK companies with good potential, that are essential in ensuring the country retains its world-leading position in science, innovation and technology. The NPIF Equity Fund Managers are already using the Future Fund to provide additional funding for innovative northern companies.
As well as financial support, it is vital that firms are receiving the right support in order to reap the rewards in the long-term by weathering the short-term issues. Our Fund Managers are on hand, working tirelessly to provide businesses with the help they need. They also work closely with the support teams operating out of the regional Growth Hubs across all ten Local Enterprise Partnerships (LEPs).
NPIF Debt Fund Managers, Mercia and FW Capital, were recently accredited to the CBILS scheme. Both can now provide CBILS loans using NPIF funding ranging between £100,000 and £750,000 to businesses that have been adversely affected by the impact of COVID-19.
Mercia will focus on providing support to businesses based in Yorkshire and the Humber, whilst FW Capital will focus on the North West, Cumbria and Tees Valley regions.
They follow NPIF’s Microfinance Fund Managers, which have previously been accredited and can provide loans ranging from£25,000 to £100,00. GC Business Finance and MSIF provide support to businesses in the North West and Business Enterprise Fund (BEF) and Finance For Enterprise (FFE) provide support to businesses in Yorkshire & the Humber and Tees Valley.
With six of our Fund Managers now delivering loans backed by CBILS, NPIF can offer alternative funding options for businesses across the North offering support to businesses through this time, so they can emerge on the other side of this economic crisis in the best position possible.
Many of the companies that have already received NPIF loans backed by CBILS have diversified in the face of the crisis to ensure they have a business model that will thrive in the long-term.
One example of this is Scarborough-based Spectrum Cleaning Solutions which received a £100,000 CBILS-backed loan from NPIF – BEF & FFE Microfinance to support its diversification into the online space. The firm is traditionally a B2B cleaning and hygiene product distributor, with the loan from BEF enabling the family-run business to shift its business model to launch an ecommerce platform. With the financial support from NPIF and BEF, Spectrum Cleaning Solutions has been able to continue its forecasts to grow revenues to £5m over the next five years.
Despite the issues that we are currently facing, I am proud to see our Fund Managers working hard to ensure that companies across the northern regions can make it through this period. It is encouraging to see the vital support being offered to ensure that the regional economies can continue to prosper.
The Northern Powerhouse Investment Fund project is supported financially by the European Union, using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.