Supporting SME growth in the Northern Powerhouse

Ryan Bevington, Fund Manager for NPIF Maven Equity Finance

The UK has an enviable reputation for innovation and entrepreneurship, with the North of England historically of huge importance, but we’re still guilty at times of neglecting the source of much of that remarkable achievement – the small business sector. It’s clear that the small business sector in the UK regions could benefit enormously from access to growth finance and support, where there’s sometimes been a peripheral historical focus by central government on driving economic growth – and nowhere has that regional imbalance been more relevant than in Northern England’s cities and towns, which have a rich heritage in areas such as manufacturing, science and technology, and played a huge part in building the UK’s worldwide reputation.

Northern Powerhouse
In 2014 the Government announced the need for a "Northern Powerhouse" to drive economic growth in northern regional economies whose collective firepower could rival that of London and the South East and make significant inroads into global markets. According to the British Business Bank (BBB) recent Spotlight Report, the North already generates almost one fifth of the UK’s GDP at £350bn per year.

That Northern Powerhouse concept recognised the clear potential of the SME sector across the North of England, and led to the creation of the Northern Powerhouse Investment Fund (NPIF). NPIF was launched by the BBB in February 2017, managed by a select group of experienced SME fund managers including Maven. NPIF aims to harness the strength, energy and economic potential of the North by investing in industries and areas of the North that have the potential to drive the region’s prosperity, job creation and skill base, as well as contributing to wider economic and environmental goals.

Operating across the Northern Powerhouse areas, from Cheshire and South Yorkshire to all points North, it will provide loan or equity finance of up to £2 million to businesses that have an operating or trading base within the region and have the potential to preserve and create jobs.

Funding and Knowledge Gap
The SME space is the engine room of the UK economy, as it regularly produces remarkable new product innovation and creates jobs, yet many of our fastest growing, highest potential private companies are still struggling to access the growth finance and expertise that will allow them to make the vital next step, such as developing disruptive technologies or breaking into new markets.

Maven is a long term investor in UK private companies across a wide range of industries, and there is clearly a funding gap constraining the ambitions of many of the region’s most promising SMEs. However another clear message from the senior management teams we deal with on a daily basis, is that many dynamic young businesses also face a knowledge or expertise gap.

In the aftermath of the credit crunch, many well managed and entrepreneurial smaller businesses have struggled to gain financial backing. Increased lending by banks in recent years has improved the situation, but often does not provide the flexible support needed by private businesses on a steep growth trajectory. Many small businesses need access to funding that goes hand-in-hand with proactive strategic support.

That’s where specialist fund managers can provide unique input and insight, providing knowledge and expertise after investment, whether that be specific knowledge of product or international markets, or simply helping the management team to professionalise the business as it grows.

The NPIF Funding Opportunity
So there remains a need for alternative sources of SME growth finance, and NPIF is looking to provide investment to eligible businesses. At Maven we have a strong record of working with potential investee companies, to assess their funding requirements and, where funding is put in place, to support their growth.

Across the North West the NPIF Maven Equity Finance fund managed by Maven will be looking to back business growth for ambitious companies, and provide the financial resources they need to fulfil their potential.

If your business is based in Cheshire & Warrington, Greater Manchester, Lancashire or Cumbria and you feel it could benefit from equity funding to help achieve its growth ambitions then you can submit an application to our NPIF team.

The fund can also invest in business in Yorkshire & Humber and the Tees Valley, and Maven is working in partnership with Liverpool-based MSIF which will be delivering the funding for businesses in the Liverpool City region.