£20 million fund aims to create 2,500 jobs in Cornwall
A £20 million business investment fund which is expected to create 2,500 jobs in Cornwall is being announced today (Monday, November 5).
Finance Cornwall will be a major venture capital and loan fund for businesses in Cornwall and the Isles of Scilly that have good projects but cannot raise money to fund them through conventional means.
The £20 million fund will be backed by £9 million of Objective One funding. Barclays Bank is contributing a further £10.2 million, and regional pension funds are providing £800,000.
Finance Cornwall is projected to create 2,420 jobs, safeguard a further 1,379 and assist 485 small, medium-sized and start-up businesses.
It will feature a small firms loan fund, a mezzanine fund and an equity fund to support the growth of existing and new business in Cornwall. This will be coupled with a programme of expert counselling from mentors and non-executive directors to support and grow the management capacity of local businesses.
Similar funds are being established simultaneously in the UK’s three other Objective One regions of South Yorkshire, West Wales and Humberside. Including Cornwall, the four regions have been working closely together as the Objective One Alliance in coalition with the EU Commission and Barclays to deliver an investment fund with a total value of £200 million.
The proposed funds will be officially announced today in London by Michel Barnier, EU Commissioner with responsibility for regional policy. Through the Objective One programme, the EU is committing £92.7 million from the European Regional Development Fund. Barclays, the main provider of private sector finance for the project, is investing £84 million, with a further £23.8 million coming from regional pension funds.
Objective One Alliance chairman Robin Teverson, the former MEP for Cornwall and West Plymouth, has been one of the driving forces behind Finance Cornwall.
He said: “Today’s announcement by Commissioner Barnier represents a major boost for Cornwall and the thousands of small businesses trying to raise finance for expansion and development.
“It’s been a hard slog to get this far but now we have the commitment of all the funding partners we expect to be able to go live with Finance Cornwall in the next few months once we have ironed out a few details, and the fund has been given final approval.
“The Cornish economy has a large number of micro-businesses and we expect the Finance Cornwall Small Firms Fund in particular to be of key importance. We want to create a thriving and prosperous business sector in Cornwall and Scilly by supporting growth, retaining and creating jobs and generating greater economic activity.”
Objective One programme manager Bill Bawden said: “This fund will be a key milestone in the Objective One programme. There are already a number of Objective One umbrella funds to help small businesses in Cornwall, but none of them on this scale.
“What Finance Cornwall will do is allow private businesses in Cornwall to benefit from Objective One in a straightforward fashion by providing business loans and equity finance for companies that have good projects but face challenges raising the necessary money.”
Chris Lendrum, chief executive of Corporate Banking at Barclays, said: “These new funds will meet a clearly defined need in Wales, Merseyside, South Yorkshire and Cornwall for debt and loan finance for growing small and medium-sized businesses which would otherwise have difficulty securing funding.
“Working with the European Commission and the members of the Objective One Alliance makes it possible for us to provide finance on a commercial basis which will enable these businesses to fulfil their potential.”
EU Commissioner Barnier said: “The new funds will address some of the problems faced by businesses in seeking the necessary finance they need to grow and to have a positive impact on local economies.
“Furthermore, the management support offered by the funds is unique and will address small companies’ other great need – experienced management time. Businesses in these four British regions covered by Objective One of the European Union’s structural funds will now be given the best chance to succeed. In addition I especially welcome the way in which these regions have worked together in true partnership and that the private sector has contributed so largely in this proposal.”
Finance Cornwall received an Objective One grant of £83,000 from the European Regional Development Fund, with match funding of over £100,000 coming from the private sector, earlier this year for a feasibility study.
Notes to Editors
1. Finance Cornwall is expected to be open for business early in the New Year, when full details will be published, including how to apply. All this information will be available on the Objective One website at www.objectiveone.com.
2. Critically, the funds will be providing loan and equity finance for business proposals that normally would not be able to obtain all of the required finance from traditional sources. This may be because either they are seen as too high risk, they have no security to offer or they have an unproven track record in business. Finance Cornwall will therefore bridge this gap that has historically restricted the growth and expansion plans of small and start-up businesses in regions heavily affected by the decline of heavy industry.
3. Over the next 10 years the funds are expected to create 18,935 jobs, safeguard 10,379 jobs, assist 3,352 small and medium sized businesses and help start more than 400 new businesses in the four Objective One areas.
4. Cornwall’s fund is worth £20 million; Merseyside’s is £80 million; South Yorkshire’s is £54.5 million and in West Wales it is worth £46 million. This makes a total of £200 million.
5. The funds have been modelled on the highly successful Merseyside Special Investment Fund, which was set up in 1996 after the area was first granted Objective One status. In the last five years it has invested £31 million, supported more than 500 businesses and helped to create or safeguard 5,000 jobs.
Objective One Partnership Office
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