MSIF's loan and equity fund is set to make its maiden investments, but investment director Marion Savill has urged more businesses to seek out the help on offer.
The Merseyside Loan and Equity Fund was launched last year to provide businesses that have been trading for two years or more with finance from £50,000 to £2m through loan, mezzanine or equity finance.
The cash is made up of capital that has returned to MSIF from repayment and realisations from investments made by funds which launched in 1996 and finished investing in 2008. The fund hopes to invest more than £25m over the next five years in enterprises based in Merseyside.
Savill said that the first two investments are set to complete, but has called on more companies to look to the fund to finance management buyouts or to secure capital to expand. She told Insider: "There's a definite equity gap between £50,000 and £2m and that's what we're aiming to address.
"James Caan recently highlighted this gap – and I agree with him wholeheartedly – but he questioned whether there was enough support out there. We identified this problem some time ago and the fund has been designed to fill the gap and encourage entrepreneurial activity." Savill added that there was a perception among businesses that there isn’t money available, but stressed that the Merseyside Loan and Equity Fund is open for business. She added that there could also be confusion about the various regional funds on offer following the launch of the £185m North West Fund late last year.
"I think there might be a lack of understanding of what's available and there might also be a lack of confidence," she said.
"There has been a huge amount of press about the fact that banks are reluctant to lend and I think there are people with growth opportunities that are holding back because of that. We want to encourage people to come and talk to us and try and get projects moving."
MSIF was set up in 1996 to hold the European Regional Development Fund’s (ERDF) contribution to the investment funds as part of the Merseyside Objective One Programme. The ERDF funds were matched with private sector support from Barclays, the Mersey Pension Fund and the Co-operative Bank.
In recent years MSIF has been using returns on investment to firstly repay the private sector and then steadily create a legacy fund. MSIF fully repaid its last significant investor last year so that now returning capital will go directly into the Merseyside Loan and Equity Fund.