A new tie-up is to help plug the funding gap facing Scottish businesses.
A new strategic partnership between the UK’s Business Growth Fund (BGF) and Scottish Investment Bank’s Scottish Venture Fund (SVF) will boost investment opportunities to the small- and medium-sized enterprise (SME) sector.
Up to £10m of investment will be available to individual Scottish companies that can demonstrate a solid track record in business and which have strong and realisable plans for growth.
The SVF was introduced in 2007 to support development of Scotland’s SME sector and up to £2m was available on the basis of public-sector investment being matched by private-sector cash.
Since its inception, the fund has invested £41.8m in 33 businesses and the combined public and private sector outlay has reached £140.7m.
The BGF was launched earlier this year with a remit to support Britain’s fast-growing SMEs as a partner investor by provide long-term equity funding and business mentoring in return for a minority stake and two seats on the board.
The fund has five staff in Edinburgh and 45 others around the UK.
The tie-up with the SVF will allow the fund to increase its presence in Scotland and regional director Simon Munro said the BGF will continue to seek further opportunities in the market.
He said: ”We are delighted to be partnering with the Scottish Venture Fund, with whom we share a commitment to supporting fast-growing, ambitious businesses.
”Small Scottish companies have in recent years struggled to attract the capital they need to invest and grow and together we can play an important part in filling that funding gap.”
He added: ”With a team of five people in Scotland, an office in Edinburgh and further appointments expected in the months ahead, we are actively talking to local businesses about what we can offer and we would urge them to come forward.”
SIB head Gerard Kelly said: ”Scotland continues to produce exciting innovative companies with global potential and by partnering with the Business Growth Fund we hope to boost access to risk capital for Scotland’s most promising enterprises.
”Our co-investment approach has proved to be a catalyst for increased equity finance in Scotland, even at a time when investors are being cautious.
”The opportunity to co-invest alongside the Business Growth Fund, a new and substantial participant to our market, is very welcome and will help address a gap in the funding cycle that existing funds are unable to satisfy.”