A £40 million investment fund to help growing small businesses in Cornwall and the Isles of Scilly is boosting business performance and changing attitudes to finance, according to a new report.
The Cornwall and Isles of Scilly Investment Fund (CIOSIF) was set up by the British Business Bank and the Cornwall and Isles of Scilly Local Enterprise Partnership (LEP) to increase access to finance for small and medium sized businesses.
It is designed to help businesses start up, invest and grow and aims to increase financing options for small businesses including access to venture capital which has traditionally been weak in Cornwall and Scilly with a lack of choice.
The British Business Bank commissioned economic development consultancy SQW to carry out an early stage assessment of CIOSIF in its first full year of operation.
It found that businesses in receipt of CIOSIF funding had shown a marked improvement in performance and productivity including:
- new highly skilled jobs and upskilling of existing skills,
- more investment in research, development and innovation; and
- the launch of new products and services.
All of the portfolio businesses had increased employment, with a quarter of the jobs created being in the top 25% of income – or above £35.6k a year, compared to Cornwall’s average annual wage of £21k.
Without CIOSIF investment, most businesses surveyed said projects would have been delayed or not happened at all, and they said CIOSIF played an important role in helping them secure match funding from other sources.
Significantly, 85% said engaging with the fund had made them more confident about raising funding from private sector sources in the future, which is seen as an important part of changing attitudes towards external finance and developing a sustainable market.
The fund’s latest equity investment was £140k to support the growth of Penryn-based agri-tech business Glas Data as part of a larger funding round which included investment form both existing and new private investors. It will allow the business to recruit new staff including software engineers, a project manager and customer services employees.
John Acornley, a director of the Cornwall and Isles of Scilly LEP and chair of the CIOSIF Advisory Board, said: “The fund has quickly established itself as an important part of the financial landscape in Cornwall and Scilly, driving job creation, business growth and innovation. Without CIOSIF a lot of the activity it has helped to fund simply would not have happened.”
Ken Cooper, MD Venture Solutions, at the British Business Bank, said: “This report shows that the Cornwall and Isles of Scilly Investment Fund is having a positive impact on businesses and it is starting to impact on the way entrepreneurs consider their growth options.
“There is growing knowledge and awareness among businesses about the different finance options available, especially when it comes to equity funding where demand is growing strongly.
“CIOSIF can be a catalyst for attracting new finance providers into Cornwall and the Isles of Scilly in the longer term. That’s important if we are going to translate finance into growth and achieve the levelling up in access to finance that the region needs.”
CIOSIF provides debt and equity finance from £25k to £2 million to help growing small businesses across the region. It is supported by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020.