Launch of Midlands Engine Investment Fund II unlocks millions in funding for smaller businesses

The fund will drive sustainable economic growth by supporting new and growing businesses across the whole of the Midlands, through investment strategies that best meet the needs of these firms. It includes a range of finance options with loans from £25,000 to £2 million and equity investments up to £5 million to help small and medium-sized businesses start up, scale up or stay ahead.

The Midlands Engine Investment Fund II aims to build on the success of the inaugural Midlands Engine Investment Fund I (MEIF I), bringing the total for investment in the region to over £700m since 2017. It will aim to further increase the supply and diversity of early-stage finance by providing options to firms that might otherwise be unable to secure investment. Funding is designed to help businesses with activities including expansion, product or service innovation, new processes, skills development, and capital equipment.

Three fund managers have been appointed to manage the fund in the West Midlands. BCRS will manage the smaller loans part of the fund (£25,000 to £100,000), Frontier Development Capital will be responsible for larger loans (£100,000 to £2 million) and Mercia Asset Management will manage equity deals (up to £5 million).

Louis Taylor, Chief Executive Officer, British Business Bank said: “Small businesses are at the heart of The Midlands’ economy. Since launching in 2017, the first Midlands Engine Investment Fund has so far created more than 4,000 jobs across the region by backing 739 smaller businesses.

“The first Midlands Engine Investment Fund provided a blueprint for how we can support entrepreneurs and founders, whoever they are and wherever they are in the region, to access the funds and support they need. This new fund will allow us to continue supporting business owners across the Midlands, whether they’re at the start of their journey or are already running an established firm.

“Promoting growth by ensuring entrepreneurs can access the finance they need regardless of where and who they are is one of the Bank’s strategic objectives, and vital to unlocking the full potential of the UK’s smaller businesses.”

Exchequer Secretary to the Treasury, Gareth Davies MP said: “Small businesses are the engine of the economy, which is why having access to funding like this is vital to help them thrive and grow, creating jobs and spreading opportunity everywhere.

“As the birthplace of the Industrial Revolution, the Midlands propelled the UK into a new era of technological and economic growth and now the next generation of entrepreneurs will have the support they need to continue this success”.

Family-owned gym and personal training business, Fitness Worx, opened a new centre in Stratford-upon-Avon after receiving £100,000 in funding from the Midlands Engine Investment Fund. Having launched successful gyms focused on personal training and group classes across Warwickshire and the wider West Midlands since 2014, Fitness Worx applied for the funds for its new location and to purchase equipment. The new fitness centre created six jobs and was the seventh premises to open under the Fitness Worx brand.

Jack Gibson, Managing Director, Fitness Worx, said: “We want to be the market leader in our sector so opening new premises helps us deliver the next phase of our ambitious growth plans.

“Like all gyms, the pandemic caused challenges to our finances so it was great to get the personal contact and support of our fund manager team. Applying for funding can be daunting but working with our fund manager made the whole process straightforward.

“As one of the largest family-owned independent gym groups in the UK, the Stratford-upon-Avon branch, achieved with support from the Midlands Engine Investment Fund, was another step towards realising our business goal. The new premises in Stratford-upon-Avon was our biggest opening to date with a finish of the highest quality.”

Following today’s launch, the British Business Bank will be holding a series of information roadshows aimed at people working with smaller businesses including enterprise agencies, advisors, accountants, law firms and more. The first of these sessions will be held in Lincoln on 11th March 2024, with additional sessions held in Leicester, Wolverhampton and Coventry, with further locations planned for April and May 2024.

To find out more and apply for funding, visit: www.midlandsengineinvestmentfund.co.uk.