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£40m investment fund launched for Cornwall and Isles of Scilly SMEs
The British Business Bank has today (June 28) launched the £40m Cornwall & Isles of Scilly Investment Fund (CIOSIF), aimed at boosting the local economy by providing debt and equity finance to help growing small businesses across the region.
The fund has been established in partnership with the Cornwall and Isles of Scilly Local Enterprise Partnership (LEP), the European Regional Development Fund (ERDF) and UK Government to provide local businesses with more funding options to help them grow and create jobs.
CIOSIF has been designed following input from local business groups, funders, business advisers and the LEP and will provide debt and equity finance from £25,000 to £2 million. It is expected to unlock a further £40 million of private investment.
Small Business Minister Andrew Griffiths said: “Small businesses are the backbone of our economy, supporting more than 1 million jobs in the South West alone and 13 million across the UK. This new fund will help us deliver on the ambition set out in our modern Industrial Strategy, with investment that will ensure the region’s small businesses can access the finance they need to grow and succeed.”
Ken Cooper, Managing Director, Venture Capital Solutions at the British Business Bank, said: “Our role is to make the finance markets work better for smaller businesses at all stages in their development. The Cornwall and Isles of Scilly investment fund has been specifically designed to support growth businesses in this area and is part of a co-ordinated approach to help them realise their potential.”
Mark Duddridge, chairman of the Cornwall and Isles of Scilly LEP, said: “This fund has been a long-held ambition of the LEP and our partners and we believe it will prove transformational by creating an enduring legacy of business investment, innovation and growth in our region.”
CIOSIF is operated by appointed fund managers FSE Group
The fund has been established to address specific funding needs in Cornwall and the Isles of Scilly. There is an identified market gap in the provision of debt and equity finance, where access to finance has been identified as a much higher barrier to growth than the England average.
Half the fund (ca £20 million) will be in the form of debt finance providing loans between £25,000 and £1 million. This will be aimed at growing businesses with a viable proposal that are unable to access all the debt finance they need from commercial sources, maybe due to a lack of collateral or track record.
The other half of the fund will be in the form of equity funding from £50,000 to £2 million for growing companies. This aims to close an identified equity gap, especially in start-up, early stage and development capital. Despite having 1% of the UK’s SMEs, Cornwall and the Isles of Scilly have just 0.1% of all UK equity deals.
CIOSIF is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020. Further investment has come from the Cornwall and Isles of Scilly Local Enterprise Partnership and HM Government.
For more information about the Cornwall & Isles of Scilly Investment Fund, please visit of follow the fund on Twitter at @CIOSIFBBB2
Business and civic leaders welcome new fund
The launch of the £40m Cornwall & Isles of Scilly Investment Fund has been welcomed by business and civic leaders in the region:
“Supporting businesses to grow is critical to the future of Cornwall. This is a welcome funding boost for the region’s businesses and is as a direct result of the devolution deal we have with HM Government, upon which we hope to build through our New Frontiers plan to empower a new approach to regional development.” – Adam Paynter, Leader of Cornwall Council and Chair of the Leadership Board for Cornwall and the Isles of Scilly
“Cornwall Chamber of Commerce believes the Cornwall & Isles of Scilly Investment Fund is a game changer for the Duchy. Whereas the grant regime has become tired and cumbersome, the combination of equity and debt investment offered by this fund will offer ambitious businesses flexible, appropriate and well managed funding for SMEs across a range of sectors.” – Kim Conchie, Chief Executive, Cornwall Chamber of Commerce
“This fund is a welcome and significant addition to the financial toolkit for businesses and their advisers, especially in helping to close the equity gap for smaller deals that the larger equity firms are increasingly tending to overlook. We are in discussions with a number of companies who are already interested in finding out more about how the fund could help with their growth ambitions, and we look forward to exploring those opportunities with them.” – David Armstrong, Corporate Finance Director, PKF Francis Clark
“Small businesses have struggled to access finance from mainstream lenders and many of our members have battled to find any kind of investment to help them grow and create jobs. Often despite having a great business concept, their sector is not eligible or they do not fit the lending or funding criteria. FSB are continually working with the Government and regulators to widen the choice of available products and alternative finance providers, and we are delighted to have been able to support this initiative in Cornwall. We hope that many more small businesses will now be able to move forward with their business plans as a result of this new investment fund, benefiting not only themselves but their communities and the county as a whole.” – Ann Vandermeulen, Development Manager, FSB Cornwall
“Knowing how much work has gone on behind the scenes by industry leaders – through the Local Enterprise Partnership and elsewhere – makes it so much sweeter now that we finally see this fund for the region taking shape. I work with businesses from across Cornwall and the Isles of Scilly every day, so I also know how much difference access to this fund will make. For many it will mean growing their business becomes a reality, rather than remaining a pipe dream.” – Gavin Poole, Partner in the corporate team at Stephens Scown LLP
Investment case study – Rocket Gardens
One Cornish business that has previously
benefited from British Business Bank investment is Rocket Gardens.
The Helston-based family business sells boxes of young organic plants, ready to be grown in gardens, window boxes, raised beds or allotments. The idea is to make it easier for anyone to grow their own vegetables.
Like many young businesses without a trading track record, Rocket Gardens initially struggled to get the finance it needed for growth. An important aim of the new £40m Cornwall & Isles of Scilly Investment Fund is to tackle this issue, as well as providing equity.
Thanks to a start-up loan from the British Business Bank, Rocket Gardens focused on improving the growing facilities on its 125-acre site, and digitising the business. This has allowed it to scale up its operation and better meet the needs of its growing customer base.
Founder Mike Kitchen was inspired by TV classic The Good Life when he started growing vegetables to feed his family in 2005. Discovering how difficult it was to nurture plants through the first stages of growth, he saw the potential to supply other amateur gardeners with small plug plants.
Rocket Gardens now sells more than one
million plants a year to around 15,000 customers across the UK and has
attracted endorsements from Hugh Fearnley
Wittingstall and Alan Titchmarsh.
Customers buy online or through mail order and receive boxes of seasonal young organic plants ready to be planted in gardens, window boxes, raised beds or allotments. As well as supplying ready-made organic vegetable, herb, fruit and flower ‘gardens’, the business provides vegetable patch boxes to schools.
Mike says: “We have always focused on growing Rocket Gardens through revenues, but there have been periods when we’ve needed more investment to take the business to the next stage. As a young company, we found we were unable to secure conventional business funding, especially launching during the recession.
“Many rural businesses like ours need investment to improve their infrastructure. Unless you can provide a high level of security, which most start-ups cannot do, the options are really limited. The Cornwall & Isles of Scilly Investment Fundis great news for Cornwall and will fill a niche for businesses like ours.
“Rocket Gardens is growing at a rate of 15 to 20 per cent a year. While we grow we continue to operate as an ethical business that is committed to teaching people to grow their own food. The investment through British Business Bank has given us the confidence to move the business forward.”