A prominent North East business leader is reassuring SMEs that investment funds set aside for the region by the European Investment Bank (EIB), via the North East Fund, are safe despite concerns surrounding Brexit and how the UK’s split from the rest of Europe could affect the local business community.
Andrew Mitchell, CEO of The North East Fund Limited, has called for SMEs requiring investment to expand or develop new products and services, to continue with growth plans, seek advice and realise their full potential given that the £120m of investment agreed for the North East over the next five years is protected.
It comes as local businesses raise concerns over regional investment for start-ups, especially in digital and tech industries, and how they have benefitted from capital made available to the region by the EU.
The North East has, over recent decades, forged very strong links with the EIB, in particular, assisting with major industrial projects such as construction of the Nissan car manufacturing plant in Sunderland and development works at Newcastle University.
The £120m allocated to North East SMEs across Sunderland, South Tyneside, Northumberland, Durham, Gateshead, Newcastle and North Tyneside, will continue to be delivered over the next five years until 2023, with the potential to build a legacy of £80m in the local economy.
Andrew commented, “Our relationship with the EIB is very strong and due to the joint deal which the two parties brokered for the region, funds outlined for the North East Fund by the EIB will continue to be delivered. Despite the uncertainty surrounding Brexit, we’re still very much looking to the future.
“This is the second time that the EIB has invested and committed to the region and this demonstrates a high level of confidence in North East-based organisations, especially SMEs. EU membership has enabled regional accelerator programmes, attracted European founders and new talent, but there is also an uncertainty regarding what could replace EIB funding in the future.
“Nobody truly knows what is going to happen after Brexit and speculation, either way, is something which cannot be avoided. However, our four fund management companies are now allocating the investment which we have secured.
“From our point of view, supporting trailblazing companies that are innovative, produce market-leading goods and who put the region on the map, will only encourage new funding opportunities in the future. The North East Fund could assist approximately 600 SMEs support economic growth, employment and generate a good return on investment, money that can be put straight back into the North East economy.”
Established in April 2018, the North East Fund is a suite of five venture capital and loan funds delivering £120m of investment for approximately 600 North East businesses up to March 2023. Fund managers provide business development advice and investment finance to small and medium sized enterprises based in seven local authority areas.
The programme encourages investment in and the commercialisation of new technologies including low carbon technologies. It aims to stimulate new business creation, private investment and entrepreneurialism in the North East with a view to creating over 2,500 new jobs. The North East Fund has overall responsibility for the programme which is delivered through five separate funds, each managed by independent, FCA regulated fund managers.