I recently spoke to James Austin, Director at the Business Growth Fund (“BGF”) for the South East.
The Business Growth Fund was set up by a consortium of big banks as a vehicle for investing in UK SMEs. The banks have provided an initial £2.5bn to the BGF, which started investing growth capital in late 2011.
I thought it might be useful to outline the sort of investments that James says the BGF considers:
- The BGF injects cash of between £2m and £10m into UK based SMEs using a combination of equity and loan notes.
- They will only ever take a minority stake so are not interested in owners looking for an exit but instead are looking for businesses with ambitious growth plans and a solid business plan to support it.
- Participating businesses should be earning annual profits of around £1 million or more and turnover between £1m and £10m.
- They are open to all industries, James mentioned a particular interest in renewables.
- There are restrictions over investing in property, the UKBF is looking to invest in solid businesses not to make bets on property.
When I spoke to James they were getting close to completing four deals but hoping to do about 25 in 2012.
If you think your business fits the characteristics of what the UKBF is looking for and want help approaching them then please get into contact.