19th May 2023

What legacy will the Midlands Engine Investment Fund have for the Midlands?

Keira Shepperson, newly appointed Director of Regional Funds for the British Business Bank discusses her new role, the Midlands Engine Investment Fund's impact in the region and the misconceptions around what finance options are available for SMEs.

On the ground

As the Director of Regional Funds, I'm responsible for overseeing the Midlands Engine Investment Fund (MEIF), the Northern Powerhouse and Cornwall & Isles of Scilly Investment Funds - working to ensure the money is used to boost small business growth and create a legacy of future investment in the regions. I was part of the team who set up the regional funds, and have worked at the Bank for seven years before taking up the  role at the start of the year.

Over the last three months, I've been on the ground, travelling across the Midlands,meeting the seven fund managers the MEIF who deliver the fund as well as other local stakeholders.  It’s been great to meet the local teams and the people who work hard to ensure SMEs get the right type of funding they need, find out more about the variety of great businesses thriving in the Midlands and ensure the MEIF has a positive impact for the wider region.

The first MEIF fund will finish deployment to new investments by December 2023, so the focus this financial year will be on supporting entrepreneurs in their growth and ensuring a smooth transition to follow-on funding wherever possible, before looking at the legacy of these funds to ensure the investments made have had a positive longer term impact.

Tangible impact

Everything the MEIF does centres around three primary objectives - breaking down barriers in access to finance for minority and female founders, supporting sustainable growth and backing innovation for the region's businesses.

Assessing the impact of the MEIF in achieving these objectives is crucial to the ongoing success of deployment for the Fund, and in ensuring the legacy of the funding remains strong.

Since being appointed to my new role, the MEIF's Evaluation Report has showcased the impact of funding for the region over the last five years. The most positive outcome we've seen, and the one I’m proudest of, is in the 2,370 jobs that have been created as a result of MEIF funding. These have also been high-value jobs, with four in every ten roles (41%) receiving salaries in excess of £37k. It’s statistics like this that truly demonstrate the benefits of MEIF investment throughout the region, and sheds light on how the fund addresses regional imbalances in access to finance.

Myth busting

One of the biggest misconceptions on access to finance is that there aren't many options available. The MEIF is an alternative to more traditional routes, providing finance to those who might not be able to access options from high-street lenders. The MEIF fund managers are able to provide specialist advice on the right type of finance for businesses, and offer support to entrepreneurs who are often going through this process for the first time.

Equity finance is sometimes known as the 'Dragon's Den' option, with many anticipating sharing a stake in their business as the only option available. While this may be the best option for start-ups with no evidence of profit yet, there are alternative funding types available, including debt finance. Through this option, the fund managers are able to sit down with businesses, build a relationship and work with the company's existing growth plans to help achieve expansion.

Though financial investment is clearly an asset to any small or medium sized business, funding from the MEIF also provides the opportunity to access mentorship, support, networks and advice from fund managers, which can all be utilised to continue the economic growth of our region.

Current landscape

The current financial landscape has seen an a squeeze on many companies ability to grow due to  the cost of living crisis and interest rates rising coupled with a tightening on lending from more traditional funding options - This is a great opportunity for MEIF to fill this demand and justifies the increased fund size since inception.

The MEIF has already achieved its primary goal of improving access to finance in the Midlands. My priority now will be on ensuring we continue to back innovative companies to grow through new investments before handing over this task to MEIF 2, following on in the successful companies who are delivering economic growth in the region and ensuring we create a sustainable legacy which continues to support small business in the MEIF region.

To find out more about the MEIF funding options available, visit https://www.meif.co.uk/funds-available/.