Sean Hutchinson, Chief Investment Officer at British Business Bank, discusses the progress the Northern Powerhouse Investment Fund (NPIF) has made in strengthening the regional economy in the five years since its launch, across its three funding options : Debt, Equity and Microfinance.
Launched in 2017, the Northern Powerhouse Investment Fund (NPIF) is a key part of the Bank’s activities to support the Government’s upgrading agenda by helping to reduce funding imbalances and create economic prosperity in the North. ‘England.
Over the past five years, the NPIF has made real progress in stimulating strong economic activity in the North. So far it has made 1,364 investments in 1,010 businesses in the North West, Yorkshire and the Humber and Tees Valley, across 10 combined Local Enterprise Authority and Partnership (LEP) areas. A total of £326m was invested directly by the Fund, while a further £488m was raised through private sector co-investment.
Funding is provided by NPIF’s network of dedicated fund managers, who work to provide its three types of funds – Microfinance, Debt and Equity Finance. Each fund is designed for businesses at different stages of their growth journey and is available for a variety of purposes.
Microfinance offers small business loans ranging from £25,000 to £100,000 and is typically used by businesses looking to fund development projects or fill funding gaps for growth. Plastic free packaging distribution company based in Liverpool, Green bell packagingsecured a £100,000 microfinance investment from NPIF – BFS & MSIF Microfinance in May 2022, and is a prime example of this in action.
Green Bell developed the first plant-based mailbag on the UK market and have since developed a range of plant-based, biodegradable and compostable packaging products. It is using investments to further develop its product line, to bolster sales to high street retailers and wholesalers. Over £20 million has been distributed through NPIF’s microfinance funds over the past five years.
Debt financing is a similar financing option, but the funds available are larger, ranging from £100,000 to £750,000. It’s a powerful tool for accelerating businesses to the next level, with funding typically used to hire staff, buy machinery, move premises, or even as working capital to finance a large order.
London Lash Pro is a Bolton-based online wholesaler of eyelashes and related products that has used debt financing effectively. He secured a £300,000 loan from NPIF – FW Capital Debt Finance in 2020, at a difficult time for the beauty industry as the pandemic forced salons to close around the world.
Thanks to the investment, the company has been able to develop its international growth plans, overcome operational challenges during the pandemic and accelerate its trajectory to reach a turnover of £12 million by 2023. It is one of 542 companies that have received loans from the NPIF debt financing fund, with a total investment of £174m deployed directly from the fund to date.
Equity finance is an important ingredient for innovative companies looking to grow at a pace that cannot be sustained by borrowing, with investments of up to £2m. It can be used at any stage of a business’ growth cycle, from startup to scaling.
Sheffield based IT service provider Azure is a shining example of a company that has experienced exceptional growth thanks to the equity financing fund. It secured a £2m investment from NPIF – Mercia Equity Finance in 2018 to drive growth. Since then, Azzure has more than doubled its profits and achieved its best year ever in 2021. It was later acquired by Content+Cloud, the UK arm of Nordic IT services group Advania, after reaching a workforce of 58 people. Since its launch, NPIF has supported 136 companies with equity financing, representing £131 million of the Fund’s investment.
The Northern Powerhouse Investment Fund’s (NPIF) suite of investment options continues to support companies of all sizes, in all sectors and on all growth trajectories. Over the past five years he has been a key catalyst for business growth in the North of England. It has facilitated the creation of new job opportunities, attracted more private sector investment and helped build the businesses of the future.
I urge any northern business considering investing to take a closer look at the financing options offered by the Fund, through www.NPIF.co.uk.
The Northern Powerhouse Investment Fund project is financially supported by the European Union through funding from the European Regional Development Fund (ERDF) under the European Structural and Investment Funds Growth Program 2014-2020 and the European Bank of investment.