8th November 2021
Last month, the Chancellor pledged further commitment to backing Northern businesses with an additional £660m earmarked for the next phase of the Norther Powerhouse Investment Fund.
Here, Sean Hutchinson, from British Business Bank, discusses the impact the funding will have on the region and the importance of reaching all corners of the North.
Since its launch in 2017, the Northern Powerhouse Investment Fund (NPIF) has proved pivotal to the growth and success of small businesses across the North. NPIF is now approaching its £300m milestone, having directly invested over £291m into 937 northern SMEs in deals that have attracted an additional £377m of private sector co-investment.
NPIF offers microfinance between £25,000 and £100,000, debt finance between £100,000 and £750,000 and equity finance up to £2m. It was also revealed last year that NPIF supports almost one in five equity deals across the North.
The Fund has been transformational in building a stronger Northern business community. The impact that it has had is clear, from enabling businesses to build skilled teams and create new products and services to supporting organisations in adopting more sustainable operations.
A Stronger North
Just this week, we have seen Manchester-based SaaS company, Pimberly, whose product information management (“PIM”) platform helps retailers, distributors and manufacturers increase sales, complete a £4.25m funding round. Having received an initial investment from NPIF – Mercia Equity Finance in 2018, the business has gone on to secure additional funding to expand into the US market and accelerate growth in the UK.
Elsewhere, a Tees Valley award-winning film company, Ithica Films, has secured a six-figure investment from NPIF – FW Capital Debt Finance, to achieve its ambitious growth plans and expand its marketing presence. Launched in 2014, Ithica Films has cemented its position as a market leader for creative film making in the North East, and the funding from NPIF is there to support the business through its next phase of growth.
NPIF funding is also helping businesses adapt to changing market demands. For example, recruitment platform for HGV drivers, Avail Technologies, has used a £300,000 NPIF – Mercia Equity Finance investment to respond to the surge in demand of drivers getting behind the wheel. Founded in 2018, the business is on target to double the number of registered users on its platform to upwards of 20,000 by the end of the year.
A new generation of NPIF
With the successes of the Northern Powerhouse Investment Fund evident through the businesses it has touched to date, it is important that we now look ahead to the future of Northern investment and the role that a successor to NPIF will play in it.
In the Autumn Statement update on Wednesday 27th October, the Chancellor pledged £660m for a successor to NPIF, marking a new generation of funding. The announcement builds on the success of NPIF to date, which has helped address market gaps and regional imbalances in access to finance.
An important update for the next generation of NPIF is that it will be extended to the North East LEP area, ensuring that it can support innovative growing business in every corner of the North. To date, the North East Fund has directly invested over £65m across Durham, Northumberland and Tyne and Wear in deals that have attracted an additional £120m of funding, so continuing this support is crucial to the future prosperity of the region.
It is vital that we see investments reach every area and businesses of all sizes and sectors. It is not just reserved for the big cities, but also all towns, rural and coastal areas that the North is well-known for.
With the funding now committed by HMG, the work is underway to ensure that the successor fund is operational before the current funds are due to be fully invested in December 2023. Collaboration is underway across the North and I will look forward to providing more information as we get closer to launch.
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.
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