The announcement of an £4m extension to the Finance For Business North East Growth Fund has led to an unprecedented surge in interest from ambitious regional businesses looking to access it.
Fund management firm NEL Fund Managers has received more than 100 enquiries over the last three months from North East companies that are looking for outside investment to help them expand, a figure which represents a 500% rise on the usual rate at which they come in.
The enquiries have been received from businesses across a range of different industries, although a greater proportion than usual are from the health and lifestyle sectors, and a significant number of enquiries have come from companies that haven’t previously approached NEL for investment support.
The enquiries are all now being processed by the NEL investment team, and it’s expected that several of them will be successful in the coming months.
The Growth Fund is a general investment fund aimed at businesses at a development and growth stage based anywhere in the North East, and since its launch in early 2010, NEL has made investments worth more than £25m in total from in businesses right across the region.
NEL is looking to make up to 15 investments of between £50,000 and £400,000 from it this year, and continuing to actively look for regional firms and their advisors who have plans to expand.
Yvonne Gale, chief executive at NEL, says: “There’s never any shortage of investment enquiries and business plans coming across our desks, but the last three months has been unprecedented – we’d usually expect to get around six to eight serious enquiries every month, but since the Growth Fund extension was announced, the phone’s never stopped.
“It’s especially encouraging to see companies choosing to take control of their own futures by looking for the investment they need to expand, and it perhaps suggests that there’s a greater degree of confidence in our business community than recent reports have suggested.
“We’re now working through the applications we’ve received, and are referring that aren’t quite investment ready on to professional advisors across the region who will help bring them up to scratch.
“The indications are that we will be oversubscribed for Growth Fund investments before the end of the year, and we would strongly urge any regional business owners who are considering going down this route to compile their business plans as soon as possible.”
Established by holding fund manager North East Finance (NEF) in 2010, the £159.5m Finance for Business North East (FBNE) programme is a suite of seven venture capital and loan funds which provide investment for start-up and growing businesses in the North East of England. They will continue investing until 2016, and aim to support 950 companies and to create or safeguard almost 10,000 jobs.
For more information about NEL’s investment criteria, visit www.nel.co.uk or contact the investment team on 0845 111 1850.