Government sponsored equity investment fund targeted at high-growth UK companies with a turnover between £5 million and £100 million.
The investment package will comprise the following:
- Investments will range between £2 million and £10 million.
- Investments will be made for an equity stake of between 10% and 50% in the business and a seat on the board.
- The average duration of the investment is expected to be five years.
- The initial fund will invest between £300 million and £350 million over the first two years.
- There is a total predicted fund of £2.5 billion to be invested over the 7-10 year lifetime of the fund, depending on additional investment capital put forward by the participating banks and other investors.
- Additional equity and debt facilities may be available as part of a wider capital package put forward by the participating banks and other lenders.
The Business Growth Fund is a £2.5 billion equity investment fund established by the government to meet growth finance needs of UK companies. The fund is targeted at companies with a high potential for growth that have a turnover of between £5 million and £100 million, and will invest between £2 million and £10 million in return for a minimum equity stake of 10%.
The Fund was created as a result of recommendations made by the Business Finance Taskforce in October 2010, which was established following the government's green paper 'Financing a Private Sector Recovery' in July 2010. The Business Finance Taskforce was put together under the British Banking Association (BBA) to analyse the finance needs of UK businesses and create a framework to support private sector growth. The Taskforce comprises CEOs and senior representatives from the BBA and five of the major UK banks:
- Royal Bank of Scotland
- Standard Chartered
The participating banks of the Business Growth Taskforce have established the Business Growth Fund with an initial commitment of between £300 million and £350 million for the first two years. Additional commitments from the banks and other investors have created a total investment fund of £2.5 billion, which will operate over a seven to ten year period.
Although there are no specific exclusions cited within the guidelines for this programme, those wishing to apply are advised to liaise with the funding provider in the first instance to discuss eligibility.
The Business Growth Fund will target established companies in the UK fulfilling the following criteria:
- Turnover of between £5 million and £100 million.
- High potential for growth.
- Seeking equity investment of between £2 million and £10 million.
The main focus of the Fund will be areas of the economy that have significant long-term potential for growth. Eligible sectors will include high-tech manufacturing, software and electronics, leisure and tourism, renewable energy and cleantech, healthcare and life sciences, industrial and business services, outsourcing, and digital businesses. However, the BGF will also support businesses with strong credentials in other sectors.
Match funding requirements are not stipulated.
Project costs - business development.