Small and medium-sized businesses across the East and West Midlands received a welcome boost today, as Barclays launched a new £370m lending fund to boost jobs and economic growth.
The new Barclays Midlands Growth Fund is more good news for the region and follows on from the £250m Midlands Engine Investment Fund (MEIF) launched last week. The collaboration between British Business Bank and the region’s ten Local Enterprise Partnerships, is part of the government’s drive to support around 1,500 SMEs and create 3,800 new jobs with debt and equity funding.
From Birmingham to Nottingham, and Hereford to Skegness, entrepreneurs, smaller manufacturers, tech firms and companies investing in innovation and growth, all stand to benefit.
Jes Staley, Barclays CEO, said:
“As a bank with Midlands roots stretching back over two centuries, Barclays is wholeheartedly committed to the success of this region.
“That is why I’m so proud to announce our new Midlands Growth Fund, to help businesses across the East and West Midlands invest in jobs and growth.
“It is the entrepreneurs, the new tech firms, the small manufacturers, and the world-leading research and development companies, which will help the Midlands become a heartbeat of the UK economy – and Barclays is keen to play its part to make that happen.”
Sajid Javid, Housing Secretary and Ministerial Champion for the Midlands Engine, said:
“The Midlands Engine already boasts over 14 per cent of the UK’s high-growth businesses and its economy is worth more than £230bn – larger than countries like Denmark.
“We want to harness its huge potential and help give small firms across the Midlands that much needed boost to grow their business.
“Ensuring every part of the UK can play to its strengths and spread prosperity is central to our Industrial Strategy. This new fund from Barclays help us generate jobs to benefit the Midlands and the British economy as a whole.”
Sir John Peace, Chairman of the Midlands Engine, said:
“The Midlands Engine is all about unlocking the significant potential that exists in our region. This new commitment from Barclays will help even more Midlands businesses to grow, and I look forward to talking to many more financial services firms on how we can work together to boost jobs and economic development.”
Brierley Hill based Midlands Structures Limited manufactures structural steelwork and welded fabrications, for commercial, construction and private clients. Guy Whittaker, Director of Midlands Structures Limited, said:
“Having access to support funding, such as the Midlands Growth Fund, creates great opportunities for SME’s and micro-organisations to help develop and grow their business in the Midlands area.”
The new fund is just one part of Barclays long-term commitment to the Midlands. The bank recently invested in the full purchase of its major employment site in Northampton, and also employs large numbers of colleagues in Coventry, Leicester and at Snow Hill, Birmingham.
Barclays has a network of 320 relationship colleagues in the Midlands, with expertise in their local markets and industry sectors, who are on hand to help businesses to grow.
A new survey from Barclays highlights the strengths of the Midlands as a place to start and grow a business. For example, the research shows that SMEs in the region spend an average of £597,277 on annual rents – £43,670 less than the UK average (£640,947).
Nearly half of the Midlands-based respondents (48%) cited the region’s transport links as a key reason for their location, while two in five (42%) said their location meant they benefitted from attractive commercial property rents.
The survey also found ample appetite among businesses for expansion plans this year. When asked what they would use extra capital for, 20% of Midlands-based SMEs said they would use the funds to diversify their business – compared with just 13% of similar sized businesses in the rest of the UK. In order of priority, below are the three areas Midlands SMEs say they would prioritise with additional funding from their bank:
- Diversifying the business (20%)
- New machinery and equipment (13%)
- Digital technologies to increase productivity (12%)
A separate Barclays survey recently found that Coventry and Leicester are two of the best places in the UK to start a new business. The bank also last year launched an Eagle Lab in Birmingham, which offers growing firms access to office space and business mentoring support.
Midlands-based businesses will be eligible for:
- Up to £250,000 overdraft without the need for property security for manufacturing companies
- Cashflow funding to invest in acquisitions and organic business growth
- Lending and debt support, which can be combined the Government’s Midlands Engine Investment Fund.
The fund will be available for five years demonstrating Barclays long-term commitment and matching the term of the Midlands Engine Investment Fund.