Birmingham SMEs Get Support Through £56m Growth Fund

Birmingham City Council's venture capital company Finance Birmingham launched a new growth programme this month, setting up a £56 million fund to support companies in the region. The growth fund is expected to help about 40 SMEs in Birmingham, the Black Country and Solihull, creating or preserving 5,000 jobs in the process, the Birmingham Post has reported.

Local Enterprise Partnership (GBSLEP), the Black Country LEP and the West Midlands Pension Fund. The West Midlands Pension Fund is providing 50% of the money invested.

The growth fund offers businesses the opportunity to apply for loans, ranging from £250,000 to £2 million to fund their development and expansion plans. Finance Birmingham expects typical investments to amount to about £1 million.

Funds will be distributed as mezzanine loans, which are a hybrid between traditional senior debt and equity and avoid part ownership by investors.

The news story, which you can read in full here, features comments by Finance Birmingham's CEO Sue Summers, who described the mezzanine fund as the largest individual growth capital fund available to SMEs in the West Midlands. According to Summers, the scale of the fund will make it possible to provide local businesses with the financial support they need to see their growth ambitions realised, while also luring other high-growth businesses into this area. Moreover, it will help support job creation and build a local entrepreneur eco-system, Summers believes.

Companies can benefit from the mezzanine fund until March 2019, when it is expected to stop running.