A new £20 million fund has been launched designed to support sustained growth for Liverpool City Region’s most ambitious businesses.
Established by Steve Rotheram, Metro Mayor of the Liverpool City Region and managed by MSIF, the Flexible Growth Fund will open to any business in the City Region undertaking a growth project.
It aims to generate new jobs in the city region, remove obstacles to business expansion, and enable a new generation of ‘change-makers’ that will set Liverpool City Region up for long-term growth.
The fund is part of Mayor Rotheram’s Business Growth Package, the largest set of business support funds seen in decades, and is part of the Mayor’s long-term plan to deliver inclusive growth across the city region.
The fund will be distributed in the form of flexible, low-interest loans, that can be accessed quickly and easily by businesses within 6-8 weeks.
This model is designed to provide fast access to finance, removing bottlenecks to unlock existing investment opportunities and leverage private sector investment in job-creating and job-sustaining projects. Loan repayments will be recycled back into the fund, providing new loan capital. This ‘evergreen’ model of fund recycling is a creative method of maximising fund values, making the money work much harder than a traditional ‘one way’ grant fund model where funds can be exhausted quickly.
The confidence and willingness of businesses to agree finance from the commercial sector is falling, with levels of commercial finance arrangements falling year-on-year since 2012. This inability or unwillingness to invest has an adverse impact on both the competitiveness of individual businesses, and the productivity of the economy as a whole. Declining productivity levels in the UK are one of the key elements contributing to weakening growth rates in some sectors.
The Flexible Growth Fund is specifically designed to break this cycle, helping trigger investment decisions and plugging this provision gap by creating a viable and attractive alternative to commercial loans to businesses, without establishing a culture of grant-dependency.
Paul Humphray, Investment Director at MSIF, said, “We are very much looking forward to helping support our regional business community in making what can sometimes be tough investment decisions.
“There is a definite gap in terms of provision from commercial lenders with businesses discouraged from following this option for many reasons. We’ve designed the Flexible Growth Fund to be as fast and as simple as possible to administer, and we’re sure our business community will take advantage. What’s more, the region will benefit from the recycling of funds, meaning we are making the money work as hard as possible for the city region to support long term growth.
“Finally, we’d like to acknowledge the role of Metro Mayor Steve Rotheram and the Liverpool City Region Combined Authority in establishing this fund. It is exactly what we need to be doing to deliver necessary growth and productivity.”
Steve Rotheram, Metro Mayor of Liverpool City Region, added, “This fund is very much about the here and now. I know how difficult it can be making investment decisions in a business. When you add to that the responsibility we have to support our region’s businesses, the purpose behind the Flexible Growth Fund becomes clear.
“We need our businesses to be firing on all cylinders and we’re determined to leave no stone unturned in our efforts to help drive inclusive-growth in the City Region, create new levels of prosperity, and help our existing businesses create new jobs.”
It is expected that the first loans from the fund will be made in Q1 2020.