Birmingham SMEs to be given £56m growth fund by Birmingham City Council
20th June 2014 | News
Small and medium-sized enterprises (SMEs) in Greater Birmingham, Solihull and the Black Country are to be given a helping hand after Finance Birmingham launched a new £56m growth fund.
The organisation, which is the funding arm of Birmingham City Council, believes the money could enable up to 40 Birmingham-based SMEs to grow, allowing the creation for 5,000 new jobs.
The fund is 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 per cent of the money invested. In addition to funding from the Government’s Regional Growth fund, cash has also been added from the two LEPs from their Growing Places allocations.
Birmingham-based firms will be able to apply for loans of between £250,000 and £2m to fund development and growth plans.
The funds will be distributed as mezzanine loans – which sit between traditional debt and equity and avoids part ownership by investors.
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, is excited about the prospect of the funds being used to build a local entrepreneurial eco-system.
“The Mezzanine fund will be the largest individual growth capital fund for SMEs in the West Midlands,” she said.
“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.”