A £200million investment fund to support the growth of small and medium-sized businesses in Dorset and neighboring counties is set to launch in the first half of next year.
The South West Investment Fund is the first in a series of new investment funds for nations and regions launched by the British Business Bank.
It will provide a commitment of £1.6bn of new funding to drive sustainable economic growth.
The South West Investment Fund will offer a range of trade finance options with loans ranging from £25,000 to £2m and equity investments up to £5m.
The new fund will cover the entire South West region, including Dorset, Bristol, Cornwall and the Isles of Scilly, Devon, Gloucestershire, Somerset and Wiltshire.
It aims to fill an identified funding gap in the South West and increase the supply and diversity of start-up funding for small businesses.
Similar funds are being planned for Wales, Scotland and Northern Ireland, along with follow-on funds for the Midlands and Northern England.
The new fund follows the success of regional investment funds already provided by the British Business Bank through the Cornwall and the Isles of Scilly (CIoSIF), Midlands Engine (MEIF) and Northern Powerhouse (NPIF) investment funds.
Since the launch of the existing funds, the bank has invested over £562 million in NPIF, MEIF and CIOSIF.
This investment has leveraged over £849m in additional private sector co-investment and supported over 1,715 small businesses.
Ken Cooper, Managing Director, Venture Solutions, British Business Bank, said: “The design of the South West Investment Fund builds on the success of our other regional funds.
“This will increase the supply and diversity of seed funding for small businesses in the region, providing funding to businesses that might not otherwise receive investment and helping to break down barriers to accessing finance.
“Levels of private lending and equity investment in the South West are significantly lower than we would expect given the region’s share of the UK’s small business population.
“This is something the new fund will tackle by supporting ambitious businesses to drive sustainable economic growth.”
The South West Investment Fund will operate on three levels: small loans (£25,000 to £100,000), debt (£100,000 to £2m) and equity (up to £5m) .
The British Business Bank is now inviting proposals from potential fund managers to operate the fund through its website from 8 a.m. on November 2.
It plans to appoint fund managers in the first quarter of 2023, and the South West Investment Fund is expected to launch in the spring of next year.
The British Business Bank is responsible for administering the Nations and Regions Investment Funds on behalf of the UK Government.
The bank establishes investment funds in areas not currently served by its existing regional financing program before launching follow-on investment funds in existing financing areas.