Northern Powerhouse fund "still a priority" as Finance Yorkshire looks to bridge funding gap
THE chief executive of Finance Yorkshire is confident that despite the uncertainty following the Brexit decision, the Northern Powerhouse Investment Fund will ensure its continuity.
Finance Yorkshire, which provides access to Seedcorn, loan and equity investments from between £15,000 and £2m, ended its latest tranche of funding in June 2016.
Chief executive Alex McWhirter said that FY was actively seeing additional funding to bridge the gap between June 2016 (the end of an extension period which the European Regional Development Fund helped support) and the start of the proposed new fund for the North.
The fund, which is being put together by the British Business Bank, is anticipated towards the final quarter of 2016. It was announced as a £400m fund in 2015 by former Chancellor George Osborne.
Finance Yorkshire acknowledged that the timings of the NPIF launch were “outside the company’s control” but Mr McWhirter said he was confident it would go ahead.
The company’s profits this year from continuing operations amounted to £109,539, compared to a loss in 2015 of £659,104.
Loss before tax decreased to £650,883 from £823,900 the year before.
Finance Yorkshire said it created 6,985 jobs this year, almost double the number predicted. It completed 133 investments in 107 businesses totalling £14.7m by end of March 2016.
The difficulty with the future of Finance Yorkshire is that it was created as a European JEREMIE (Joint European Resources for Micro- to Medium- Enterprises) populated by grants from the UK Single Programme and the European Regional Development Fund, as well as investment from the European Investment Bank.
Following the Brexit decision, its funding streams became uncertain.
Mr McWhirter told TheBusinessDesk.com: “We are in discussions with two of the LEPs and the British Business Bank is working very hard on delivering the Northern Powerhouse Investment Fund.
“I have been told that the Northern Powerhouse fund is still a priority and we are confident that we are seeing as much demand for gap funding as two or three years ago.
“We will look at where funding hasn’t happened, what market dynamics are indicating, and look at how to bridge that gap, as well as building up a legacy. We want to reinvest in the region.
“But the focus for us is this seamless transition between us and the Northern Powerhouse Investment Fund.”
Mr McWhirter said he expected to hear back about the NPIF shortly.
He said: “If I were to choose a word to describe us this year it would be agility – so we can respond to any delays and market opportunities, and direct funds to the areas that need it.
“We’re looking good but will keep a close eye on the situation.
“The bottom line is that the region still has a need for Finance Yorkshire. Banks and financial houses are unwilling or unable to fund, but businesses still need a gap-focused fund.”
The company has invested £104.7m in SMEs in Yorkshire and the Humber. Its Seedcorn fund has helped 25 businesses, with three now listed on the London Stock Exchange.
