The British Business Bank is launching its new £130 million Investment Fund for Wales today (23rd November), unlocking additional funding to help smaller businesses to prosper and thrive.
The fund will drive sustainable economic growth by supporting new and growing businesses across the whole of Wales 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 Bank’s Investment Fund for Wales will be the first solely UK government-backed investment fund for smaller businesses in Wales, helping to increase the supply and diversity of early-stage finance by providing options to firms that might otherwise not receive 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. BCRS Business Loans will manage the smaller loans part of the fund (£25,000 to £100,000), FW Capital will be responsible for larger loans (£100,000 to £2 million) and Foresight will manage equity deals (up to £5 million).
Louis Taylor, Chief Executive of the British Business Bank, said: “Wales is a nation of innovative smaller businesses. These start-ups, scale-ups and established businesses often require initial, or further finance, in order to launch, to maintain momentum, or to develop their full potential.
“This fund, which has been designed specifically for Welsh businesses, is intended to further address the challenges of access to finance and to provide opportunities for business talent in Wales to grow, to develop and to thrive.
“Over the past nine years we have supported thousands of Welsh businesses across urban and rural Wales and with the launch of the Investment Fund for Wales we will be able to go further and deeper, to support hundreds more as they continue to contribute to the ongoing sustainable success of the wider Welsh economy.”
Mike Owen, Chief Executive of FW Capital, said:
“As one of the UK’s largest regional investors, we have a strong track record in providing much-needed finance to small and medium-sized businesses since 2010 – including for the Northern Powerhouse Investment Fund since 2017.
“This is the second fund we’ll be delivering for the British Business Bank under their programme of Nations and Regions Investment Funds, following the successful launch of the South West Investment Fund earlier this year. We’re proud that the British Business Bank has appointed us to deliver larger loans for the Investment Fund for Wales and look forward to seeing it supporting ambitious businesses on their growth journey across the whole of Wales."
Welsh Secretary David TC Davies said:
“I’m delighted to see the UK Government backing this £130m Investment Fund for Wales. We are a nation of entrepreneurs and this fund will provide much needed finance for start-ups to turn their great ideas into a business. The fund will also support smaller businesses who need support to expand and grow.
“This new source of financing will help the UK Government deliver on our priority of creating jobs and driving prosperity in Wales.”
The Investment Fund for Wales is the fourth in a series of six new Nations and Regions Investment Funds being launched by the British Business Bank and follows the launch of The Investment Fund for Northern Ireland earlier this month, The Investment Fund for Scotland in October and the South West Investment Fund in July. A total of £1.6 billion has been committed to the new funds to drive sustainable economic growth and break down barriers in access to finance.
Among the Welsh businesses to already benefit from the British Business Bank’s support is Cardiff-based tech firm QLM Technology Ltd, which develops unique quantum gas LiDAR (laser imaging, detection, and ranging) for methane.
QLM received funding from British Business Investments, a commercial subsidiary of the British Business Bank, through a £12 million Green Angel Syndicate (GAS) funding round, led by energy services company Schlumberger.
GAS is a delivery partner of the Regional Angels Programme, the UK’s only angel investment syndicate with a specialist climate changing fighting agenda.
Dr Murray Reed, CEO of QLM Technology, which has facilities in Cardiff, Bristol, Paignton and San Francisco, said: “The investment from the Bank has been transformative.
“Crucially, it has enabled us as a small company with very big ambitions to invest in a new manufacturing plant at EPIC Electronics & Photonics Innovation Centre in Paignton.
“It’s very difficult to change the perception and direction of the oil and gas industry and it has taken us a long time and will continue to take time. Companies like ours require patient capital.
“We’re therefore very appreciative of the British Business Bank and GAS for having that vision and looking into the potential and the real strategy behind the work that we’re doing.
“The funding is starting to have a real impact. We are building, producing and shipping product. It’s the beginning of a long journey for our work quantifying gas, which is an important part of a green or carbon economy.”
Following today’s launch, the British Business Bank will be holding a series of information roadshows aimed at people working in the small business finance ecosystem including enterprise agencies, advisers, accountants and more. The first of these will be held in Llandudno on 20 February 2024 with additional sessions held in Aberystwyth, Swansea and Newport later that week. An online version of the session will also take place on 7 December 2023 at 11.00am.
To find out more and apply for funding, visit: www.investmentfundwales.co.uk
