Business Growth Fund – Support for SMEs?

21 Feb 2011

Launched by the UK’s biggest banks, the Business Growth Fund will support SMEs with a potential £2.5bn of private equity. For those companies with sales of up to £100m, the fund will invest between £2-10m in order to sustain and further growth.

The key contributors are Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland, Santander UK and Standard Chartered and will look to invest around £300m across 20 deals over the next 12 months.

Under the watchful eye of the chairman, Sir Nigel Rudd, who also chairs BAA, the airports operator, the fund will look to have offices outside of London.

In an interview with the Telegraph, Sir Nigel Rudd said of offices outside of the M25: "I think it would be absolutely on the cards. In terms of symbolism, it would not be a bad idea….We are certainly going to have Birmingham, one in northern England, Glasgow and Northern Ireland.”

The fund has the aim of providing a different type of support away from bank loans and overdrafts which SMEs should cease relying on in the long term.

Originally conceived by the previous Labour government in response to the problems in accessing finance during the downturn this project has become part of the Project Merlin discussions which will reform banking activities whilst supporting SMEs.