£400 million independent business boost for Birmingham as Midland Engine Investment Fund II launches

The British Business Bank is launching its £400 million Midlands Engine Investment Fund II today (Thursday, February 29), unlocking additional funding to help smaller businesses in the West Midlands prosper and thrive.

The fund claims that it is set to drive sustainable economic growth by supporting new and growing businesses across Birmingham and the whole of the Midlands, through investment strategies that best meet the needs of these firms. 

It includes a range of finance options with loans from £25,000 to £2 million and equity investments up to £5 million to help small and medium-sized businesses start up, scale up or stay ahead.

The Midlands Engine Investment Fund II aims to build on the success of the inaugural Midlands Engine Investment Fund, a £300m fund which has supported 440 businesses in the West Midlands since its launch in 2017. 

The British Business Bank says the new fund will help hundreds more businesses to achieve their potential and further increase the supply and diversity of early-stage finance by providing options to firms that might otherwise be unable to secure investment. 

Funding is designed to help smaller businesses with activities including expansion, product or service innovation, new processes, skills development, and capital equipment.

Three fund managers have been appointed to manage the fund in the West Midlands. BCRS Business Loans will manage the smaller loans part of the fund (£25,000 to £100,000), Frontier Development Capital will be responsible for larger loans (£100,000 to £2 million) and Mercia Ventures will manage equity deals (up to £5 million).

How do I find out more about the Midlands Engine Investment Fund II for business?

Following today’s launch, the British Business Bank will be holding a series of information roadshows aimed at people working with smaller businesses including enterprise agencies, advisors, accountants, law firms and more.

The first of these sessions will be held in Lincoln on 11th March 2024, with additional sessions held in Leicester, Wolverhampton, and Coventry, with further locations planned for April and May 2024. To find out more and apply for funding, visit: www.midlandsengineinvestmentfund.co.uk

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‘4,000 jobs created by first Midlands Engine Investment Fund’

Louis Taylor, Chief Executive Officer, British Business Bank said: “Small businesses are at the heart of The Midlands’ economy. Since launching in 2017, the first Midlands Engine Investment Fund has so far created more than 4,000 jobs across the region by backing 739 smaller businesses.

“The first Midlands Engine Investment Fund provided a blueprint for how we can support entrepreneurs and founders, whoever they are and wherever they are in the region, to access the funds and support they need. This new fund will allow us to continue supporting business owners across the Midlands, whether they’re at the start of their journey or are already running an established firm.

“Promoting growth by ensuring entrepreneurs can access the finance they need regardless of where and who they are is one of the Bank’s strategic objectives, and vital to unlocking the full potential of the UK’s smaller businesses.”

Exchequer Secretary to the Treasury, Gareth Davies MP said: “Small businesses are the engine of the economy, which is why having access to funding like this is vital to help them thrive and grow, creating jobs and spreading opportunity everywhere.

“As the birthplace of the Industrial Revolution, the Midlands propelled the UK into a new era of technological and economic growth and now the next generation of entrepreneurs will have the support they need to continue this success”.

Second Home Studios, an animation and production house based in Birmingham, received significant investment from the Midlands Engine Investment Fund in January 2023. The funding enabled the team to renovate its Digbeth premises, obtain new equipment and generate 16 additional jobs at Second Home Studios Ltd, further boosting the local economy.

Christopher Randall, Founder and Creative Director, Second Home Studios, said “The support we received from the Midlands Engine Investment Fund allowed us to expand our premises in order to embark on a brand new stop-motion animated series for Channel 5. The 40 episodes of 'Tweedy & Fluff' is the first production of its kind to come from Birmingham. The studio conversion was expansive at a time when both materials and energy costs were skyrocketing. 

“No other funding existed to enable us to take such risks, so the MEIF was the only option. There typically isn't much support out there for growth on this scale for creative studios, so securing this funding meant an awful lot to our business. As a result we've been able to set up a brand new studio facility in the heart of Digbeth, which means that we can now embark on exciting new projects with new collaborators that otherwise may not have been possible."