Finance Birmingham launches £56m growth fund for SMEs

FINANCE Birmingham has launched a £56m fund aimed at helping small and medium-sized companies (SMEs) from Greater Birmingham, Solihull and the Black Country to grow.

The organisation – the funding arm of Birmingham City Council – suggests the fund could be a catalyst for more than 40 companies to expand and will support 5,000 local jobs.

It further suggests the fund will be the largest individual growth capital fund for SMEs in the West Midlands.
 
The fund is the a result of a public and private sector partnership between the Greater Birmingham & Solihull Local Enterprise Partnership (GBSLEP), the Black Country LEP and the West Midlands Pension Fund.
 
The West Midlands Pension Fund will provide 50% of the money invested.

In addition to funding from the Government’s Regional Growth Fund, cash has been added from the two LEPs from their Growing Places allocations.
 
Businesses will be able to apply for loans of between £250,000 and £2m to fund development and growth plans. Typical investments are expected to be around £1m.
 
The funds will be given as mezzanine loans – which sit between traditional debt and equity and avoids part ownership by investors.

They provide a solution for businesses which need funds quickly or have less security to offer traditional funders, despite performing well.

Finance Birmingham’s Mezzanine Fund will run until March 2019. 

Sir Albert Bore, leader of Birmingham City Council, said: “This fund demonstrates how public and private funds can be structured and leveraged to create a dynamic resource for growing businesses across the West Midlands.

“Our region is home to a growing and diverse range of entrepreneurs who, with the right support and backing, can create jobs and boost the local economy.” 
 
Sue Summers, chief executive of Finance Birmingham, said: “The Mezzanine Fund will be the largest individual growth capital fund for SMEs in the West Midlands.

“Its significant scale means that not only will we be able to support local businesses that need finance to achieve the growth they are capable of, but that we will be able to attract other high growth firms to the area, support job creation and build our local entrepreneur eco-system.”