The British Business Bank is set to launch a £150m investment fund this summer, aimed at driving the growth of small and medium-sized businesses in Scotland.
The Investment Fund for Scotland is one of a series of nations and regions funds being launched by the state-owned economic development bank, aiming to deliver £1.6bn to smaller businesses across the UK.
The fund will offer a range of commercial finance options, with loans from £25,000 to £2m and equity investment of up to £5m.
Similar funds are planned for Wales, Northern Ireland and the south west of England, along with follow-on funds for the Midlands and the north of England.
Ken Cooper, managing director for venture solutions at the British Business Bank, said: “The new Investment Fund for Scotland builds on the success of the bank’s existing regional funds and is designed to increase the supply and diversity of finance available to smaller businesses in Scotland.
“Given the geographical spread of Scotland’s smaller business population, connecting with entrepreneurs in some of the more rural and hard-to-reach areas will be an important focus of the fund.
“While we have seen an encouraging stream of equity deals into Scottish firms over the past couple of years, the overall levels of equity investment and also private debt lending remain much lower than Scotland’s share of the UK’s small business population, so we’ll be working closely with the local small business finance ecosystem to ensure the fund provides support to innovative, ambitious business owners across the country.”
The Investment Fund for Scotland will operate across three tiers: smaller loans (£25,000 to £100,000), debt (£100,000 to £2m) and equity (up to £5m).
The British Business Bank is now inviting proposals from potential fund managers to operate the new fund for Scotland.
It expects to appoint fund managers in the spring, ahead of launching in the summer.
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