A £200m investment fund designed to support the growth of small and medium-sized businesses in the South West is due 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, which will generate a commitment of £1.6bn of new support with the aim of stimulating sustainable economic growth.

The new venture will offer a range of trade finance options with loans ranging from £25,000 to £2m and equity investments up to £5m.

It will cover the entire South West region including Bristol, Cornwall and the Isles of Scilly, Devon, Dorset, Gloucestershire, Somerset and Wiltshire.

The South West Investment Fund aims to fill an identified funding gap in the region 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 initiative follows the success of the regional investment funds already implemented by the British Business Bank through the Cornwall and the Isles of Scilly (CIoSIF), Midlands Engine (MEIF) and Northern Powerhouse (NPIF) investment funds.

Ken Cooper, Managing Director of Venture Capital Solutions at British Business Bank, said: “The design of the South West Investment Fund builds on the success of our other regional funds. It will increase the supply and diversity of start-up financing for small businesses. in the region, providing finance to businesses that would otherwise not 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.”