The Business Growth Fund (BGF) is a £2.5 billion, government sponsored equity investment programme established to meet the growth finance needs of UK companies.
The Fund has recently halved its minimum qualifying turnover criterion for applicant businesses from £10 million to £5 million. Lowering the qualifying criterion is anticipated to significantly increase the number of businesses able to apply.
Investments are being made in small and medium-sized UK businesses, offering a collaborative approach to financing growth and working closely with the companies in which it invests.
The BGF 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, designed to analyse the finance needs of UK businesses and create a framework to support private sector growth.
In summary, the BGF will:
- invest between £2 million and £10 million in return for an equity stake of between 10% and 50% in the business and a seat on the board;
- invest in established UK companies with sales of approximately £5 million up to £100 million per annum;
- have enough capital and resources at hand to move very quickly for the right opportunities;
- offer longer-term funding over five to seven years or more, investing off its own balance sheet;
- develop a partnership approach with investee businesses, agreeing shared goals and objectives from the outset;
- look for businesses with evidence of a strong track record and demonstrable growth potential;
- carry out targeted due diligence in a cost-effective and timely manner; and
- consider investment opportunities and businesses in all sectors, apart from financial services and real estate.
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.
Applications may be submitted at any time.
Source: businessgrowthfund.co.uk, 31/08/11