High Growth Business Program grants 73% of funding to businesses in London and the South


A government program put in place to ensure some of the country’s most exciting businesses can continue to grow during the lockdown has given nearly three-quarters of its funding to businesses in London and the South.

The Future Fund was established last year to ensure that start-up and expanding businesses whose progress would otherwise have been affected by the coronavirus pandemic are still able to access finance for their growth.

The fund – which was seen as essential to ensuring that high-growth companies can contribute to the UK’s economic recovery – was recently liquidated, with the British Business Bank revealing that 59% of the funding went to companies in London, followed by 14% in the rest of the South.

In contrast, the North – which accounts for around 22% of the UK’s population – received 11% of available funds.

Weak funding for northern businesses was at least better than that given to businesses in the Midlands (4%) and the combined decentralized nations of Scotland, Wales and Northern Ireland, which received just 3% to both of them.

The British Business Bank said the loan figures were “in line with broader trends in the equity investment market”, but the huge amount of funding for London companies has been called into question in light of the program ” leveling “of government.

Newcastle Central MP and Shadow Minister for Business Chi Onwurah said: “Time and again the Prime Minister’s warm words on ‘leveling up’ are betrayed by the reality on the ground in the North.

“We need a strong, long-term industrial strategy that creates lasting prosperity in all regions, not ad hoc pots of money held by Whitehall that we have to fight for.”

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Jonathan Walker, director of policy at the North East England Chamber of Commerce, added: “We know that many innovative start-ups in our region have been unable to access key Covid support programs in the stronger from the pandemic and it’s great that the British Business Bank has been able to fill this gap.

“Supporting these types of businesses will be essential in starting and sustaining a vibrant economic recovery. There is work to be done in the region and nationally to bring more funding to regions like ours rather than being drawn to areas with more established financial and stock markets. “

The Future Fund was created for high-growth companies unable to access other coronavirus support programs, many of them in the ‘pre-profit’ stage that is often seen in young tech companies. To qualify for loans, companies had to match funding offered by the Future Fund with investments from third-party organizations.

In total, the Future Fund has provided £ 1.14 billion in convertible loans to 1,190 companies. The North East has received 31 loans totaling £ 28million, including companies such as Boiler Plan, Donr and Screenreach.

In the North West, 84 loans totaling £ 61.6million, while 35 Yorkshire and Humber companies secured investments worth a total of £ 39million.

The British Business Bank also administered the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS), offering just over £ 2 billion in loans to 51,181 businesses in the North East.

Last week, Prime Minister Boris Johnson delivered a speech on his upgrade agenda, saying it was important to tackle regional inequalities so that “everyone, everywhere, feels the benefits of this recovery and that we rebuild better across the UK “.

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