£2.5bn Business Growth Fund launched

A £2.5bn fund investing in SMEs backed by Britain’s major banks was being launched today.

The Business Growth Fund will invest between £2m and £10m in return for a minimum 10% stake and a seat on the board for a Fund director.

It is being backed by Barclays, HSBC, Lloyds, RBS, and Standard Chartered and will be launched this morning in Birmingham, where the Fund has opened its first office.

Fund chief executive Stephen Welton said: “The Business Growth Fund represents a new collaborative approach to financing growth by investing equity capital in Britain’s most dynamic businesses.

“This will give businesses the boost they need to create new products and services, sell to new markets and create new jobs.

“Companies of this size have often struggled to secure financing to support their growth plans – too big for start up funding and too small to tap into larger commercial funding.  We are responding to that need.  We will not only provide longer term finance but will also offer ongoing help and advice, working closely in partnership with the businesses that we back.” 

The Business Growth Fund was one of the outcomes of the Project Merlin agreement on improving the way banks support business.