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Headshot of Keith Morgan, CEO of the British Business Bank

The Northern Powerhouse Investment Fund (NPIF) has made a strong start in its first year and is already having an impact on businesses across the North of England through providing capital to back their expansion plans. Part of that success rests on the level of collaboration of all those involved in NPIF – the 10 Local Enterprise Partnerships, the European Regional Development Fund, the European Investment Bank and HM Government – and their commitment to making it easier for small businesses to access funding.

As a result of that support, NPIF has already invested over £31m into 207 businesses, while also leveraging an extra £32m from the private sector. Funding is one part of NPIF’s impact.  Fund managers and stakeholders have engaged with the small business community, helping to demonstrate the success of regional funding models and the importance of having networks on the ground.  This provides the knowledge and, over time, the capability to support business growth for the long-term.

As we enter NPIF’s second year, we will be looking to build on this good start, recognising that there is still much to do.  While research from our latest ‘Small Business Finance Markets’ report revealed that Northern businesses are increasingly benefiting from improved access to and awareness of equity and alternative finance, the volume and value of funding remains concentrated in London. Gaps in equity funding, often so important for businesses with high growth ambitions, are particularly apparent.  Our report found that only 11% of UK equity deals and 18% of total angel investments took place in the north.

Increasing the supply of finance is one part of the funding equation.  What our research shows is that demand for finance also plays a critical part. Like the supply of finance, there are clear regional variations both in awareness and understanding of different forms of finance.  Using equity again as an example, awareness and uptake of equity and other forms of growth finance is higher in London and the South East as entrepreneurs are more comfortable with taking this form of finance that can be a vital ingredient for growth.

Part of the Bank’s aim is to raise awareness of these different forms of finance and to close these regional gaps.  Our activities through NPIF to engage with the small business community is one part of that effort.  The Bank is however putting more resources into tackling these gaps.  By the autumn we will have a new network of regional managers working for the Bank, as announced in last year’s Industrial Strategy, including across the NPIF region.  And to improve understanding of the finance options available on the market, we will soon be launching a new digital hub that will be a single, simple to use resource for businesses with ambitions to scale-up.

Together, these will build on the momentum that has been created through the launch of NPIF and I look forward to working together with you to help deliver this important agenda.

Keith Morgan, CEO at British Business Bank 

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.

Editors Notes

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