Andy Ferguson, Partner of Maven Capital Partners, announces new initiative for Midlands based SMEs

The UK has an enviable reputation for innovation and entrepreneurship, but we are still guilty at times of neglecting the wellspring for much of that remarkable history – the small business sector, and there is clearly a funding gap constraining the ambitions of SMEs.

Maven is a long term investor in UK private companies across a wide range of industries and one clear message from the senior management teams we deal with on a daily basis is that many dynamic young businesses also face a knowledge or expertise gap.

The SME sector is the engine room for the UK economy, stimulating new product innovation and creating jobs and yet many of our fastest growing, highest potential private companies are still struggling to access the growth finance and expertise that will allow them to make that vital next step, such as developing disruptive technologies or breaking into new markets.

Add to that an often peripheral historical focus by central government on driving economic growth in areas of the UK outside the South East, and it is clear that the small business sector in the UK regions could benefit enormously from access to growth finance. Nowhere is that more relevant than in the Midlands’ cities and towns, which boast 460,000 smaller businesses and have a rich heritage in areas such as manufacturing, science and technology, and played a huge part in building the UK’s worldwide reputation.

In 2014 the Government announced the need for a “Midlands Engine” to drive economic growth across the regional economy and harness its collective firepower, in order to rival other UK regions and make significant inroads into global markets. Whilst the Midlands Engine may only be a concept it recognised the clear potential of the SME sector across the Midlands, and led to the creation of the Midlands Engine Investment Fund (MEIF). As part of that strategic development the West Midlands Debt Fund and the East & South East Midlands Debt Funds were recently launched, both managed by Maven, aiming to provide funding to industries and areas across the Midlands that have the potential to drive regional economic prosperity and job creation.

Operating across the Midlands, the Debt Fund is designed to provide loan finance of between £100,000 and £1.5 million to businesses that have an established trading base within the Midlands region and can demonstrate the potential to preserve and create jobs in the medium term.

In the aftermath of the credit crunch, many well managed and entrepreneurial smaller businesses have struggled to gain financial backing. Increased lending by banks in recent years has improved the situation, but often does not provide the flexible support needed by private businesses on a steep growth trajectory. In many cases those small businesses need access to financial support that goes hand-in-hand with strategic support, to help them access the knowledge or expertise, whether that be specific knowledge of product or international markets, or simply helping the management team to professionalise the business as it grows.

Andy Ferguson, Partner, commented: “There remains a need for alternative sources of SME finance, to address the gap in the market between the often missing lower-risk, lower-return bank debt, and higher-risk, higher-return equity investment; at Maven we have a strong record of working with potential investee companies, to assess their funding requirements and, where funding is put in place, to support their growth.”

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