The Treasury is putting £400 million in to the next generation of the Midlands Engine Investment Fund (MEIF), bringing the total amount of investment available to SMEs in the region to more than £700 million.
The Government said it represents a significant commitment to support access to finance in the Midlands – a region which it says has suffered from gaps in the market.
This next generation of the MEIF – delivered by the British Business Bank – will provide “significant scale growth capital” through a combination of debt and equity available for firms in the region.
The Government said an additional £50 million has been allocated to the current MEIF programme to take it to £300 million, ensuring continuity of funding whilst the next generation of MEIF comes online.
The existing regional funds have been in operation since 2017, and were set up to help address market gaps in access to finance and support regional economic growth, through jobs, upskilling workers, and helping businesses scale up.
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In 2020, the Midlands Engine Investment Fund was responsible for 25 per cent of all equity deals in the Midlands.
The current MEIF fund has invested £142 million in Midlands SMEs since launch in 2017.
Its investments have helped leverage a further £150 million of private sector funds into those businesses and is forecast to create more than 3,800 jobs.
British Business Bank chief executive Catherine Lewis La Torre said: “The Chancellor’s announcement is a clear and welcome show of support for the Midlands’ most ambitious and innovative businesses and the success of the MEIF to date.
“Since launching in 2017, the MEIF has helped more than 460 businesses invest, innovate, grow and create jobs.
“There is a strong sense of momentum and ambition in the Midlands right now.
“The region’s businesses are looking to come back stronger and push forward with growth plans. These funds will continue to support innovation, expansion and the creation of high value jobs.”
Midlands Engine chairman Sir John Peace said: “I am delighted that the government has committed this significant level of investment to support Midlands business growth – particularly SME growth in our region.
“SMEs are the backbone of our dynamic Midlands economy – and for too long there have been barriers around access to appropriate finance for growth for ambitious firms.
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“We are a region of entrepreneurs and truly ambitious businesses – that can, and do, compete on the global stage as well as deliver high quality jobs and the products and services our nation needs.
“As we look to build an ever-stronger UK economy and act powerfully in global markets, access to financial support for development and innovation, and for expansion, including reaching new markets, is critical.
“Midlands firms stand ready to accelerate our economic growth, given the tools they need – and in fact, they are already delivering tangible impact and driving recovery.
“Finance for growth is simply essential which is why I am pleased to see Government backing our business community with the confirmation of this investment today.”
The next generation of MEIF is a key part of the Government’s commitment to Levelling Up the UK economy and overcoming regional imbalances, specifically in access to finance for SMEs.
Working with the Midlands Engine, the West Midlands Combined Authority and Local Enterprise Partnerships, fund managers and the business community, the MEIF will continue to broaden funding options and opportunities available to Midlands businesses.