The British Business Bank has today (June 28) launched the £40 million Cornwall & Isles of Scilly Investment Fund (CIOSIF), aimed at boosting the local economy by providing debt and equity finance to help growing small businesses across the region.
The fund has been established in partnership with the Cornwall and Isles of Scilly Local Enterprise Partnership (LEP), the European Regional Development Fund (ERDF) and UK Government to provide local businesses with more funding options to help them grow and create jobs.
CIOSIF has been designed following input from local business groups, funders, business advisers and the LEP and will provide debt and equity finance from £25k to £2 million. It is expected to unlock a further £40 million of private investment.
Small Business Minister, Andrew Griffiths, said: “Small businesses are the backbone of our economy, supporting more than one million jobs in the south west alone and 13 million across the UK.
“This new fund will help us deliver on the ambition set out in our modern Industrial Strategy, with investment that will ensure the region’s small businesses can access the finance they need to grow and succeed.”
Ken Cooper, MD of Venture Capital Solutions at the British Business Bank, said: “Our role is to make the finance markets work better for smaller businesses at all stages in their development. The Cornwall and Isles of Scilly investment fund has been specifically designed to support growth businesses in this area and is part of a co-ordinated approach to help them realise their potential.”
Mark Duddridge, chairman of the Cornwall and Isles of Scilly LEP, added: “This fund has been a long-held ambition of the LEP and our partners and we believe it will prove transformational by creating an enduring legacy of business investment, innovation and growth in our region.”
The initiative has also been welcomed by local business leaders. Cornwall Chamber chief executive, Kim Conchie, called it “a game changer”.
“Whereas the grant regime has become tired and cumbersome,” he remarked, “the combination of equity and debt investment offered by this fund will offer ambitious businesses flexible, appropriate and well managed funding for SMEs across a range of sectors.”
And David Armstrong, corporate finance director at chartered accountancy firm, PKF Francis Clark, said: “This fund is a welcome and significant addition to the financial toolkit for businesses and their advisers, especially in helping to close the equity gap for smaller deals that the larger equity firms are increasingly tending to overlook.
“We are in discussions with a number of companies who are already interested in finding out more about how the fund could help with their growth ambitions, and we look forward to exploring those opportunities with them.”
CIOSIF is operated by appointed fund managers FSE Group. The fund has been established to address specific funding needs in Cornwall and the Isles of Scilly. There is an identified market gap in the provision of debt and equity finance, where access to finance has been identified as a much higher barrier to growth than the England average.
Half the fund (ca £20 million) will be in the form of debt finance providing loans between £25k and £1 million. This will be aimed at growing businesses with a viable proposal that are unable to access all the debt finance they need from commercial sources, maybe due to a lack of collateral or track record.