Birmingham City Council invests in SMEs

Friday 28 August 2015

Finance Birmingham, which is the venture capital branch of Birmingham City Council, has announced that it has invested more than £25 million in small to medium-sized enterprises (SMEs) across the UK in a bid to encourage economic regeneration, according to the Birmingham Post.

Overall, 35 businesses have benefited from the funding, and have been able to create more than 1,200 new jobs over the past 12 months as a result.

Birmingham Finance was set up in 2010 to combat the effects of the global financial crisis. The public private partnership initially had capital of £10 million to invest, but this has grown as businesses have paid back loans, which are charged at market rates. It still provides these loans, but now also offers equity funding (investment in exchange for part-ownership), or arrangements that combine these two products.

Initially, the organisation was set up to provide finance to mainstream businesses that had been rejected by conventional banks, but went on to expand its remit to focus on smaller organisations. This is a reflection of the powerful impact that SMEs can have on the economy at both a local and national level.

A typical investment can be anything from £10,000 to £1 million, although sums outside this range are possible with negotiation.

Birmingham Finance’s chief executive Sue Summers said: "SME businesses are the driving force of the UK economy. While representing less than one per cent of established businesses, high growth SMEs are responsible for 20 per cent of all job growth over a typical three-year period. Supporting these businesses is therefore vital.

"Over the last 12 months, we have focused very clearly on helping to provide not only the flexible funding options that these businesses need but a speed of delivery and expert advice not found elsewhere."

She added that there was still a remaining £65 million to be allocated, and encouraged any SMEs “with solid growth plans” that might be interested to make an application for a share.

Previous recipients of Birmingham Finance support include the Handmade Burger Company, which was provided with £600,000 to upgrade the interior of a new restaurant in Grand Central.

Handmade Burger Company’s owner Chris Sargeant said: "As a business, our ambitions were first brought to life in Birmingham so it is fitting that our growth continues to be fuelled by the city that has long supported us.

"Finance Birmingham took the time to understand our business, growth plans and the speed at which our industry moves. They are an agile and highly experienced team that has allowed us to make huge strides in our nationwide expansion plans in a short space of time."

Coventry Chemicals received £1.75 million to support its desire for international expansion, including a major export drive, and retail design company Green Room was allocated a substantial sum to help it expand further. It has been able to create 140 new jobs thanks to the funding.

In the future, Birmingham Finance hopes to further increase the amount of money it can provide to SMEs, whether from Birmingham or elsewhere in the UK.

By Victoria McDonnell

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