Finance Yorkshire in £15.5m worth of investments

The taxpayer-backed vehicle launched in March 2010 and made its first investment in September that year and by the end of 2011 had received applications from 518 companies.

This means that around 30 per cent of applications have been successful.

Barnsley-based Finance Yorkshire wants to increase the number of investments.

Alex McWhirter, chief executive, said once a fund has been established, “what you are able to do is accelerate that level of investment fairly quickly. That’s on plan”.

He called on businesses with growth potential and intermediaries who advise promising companies to get in touch.

But caution and economic uncertainty might be suppressing demand.

“We are in the market place providing financial investment through equity and loans to SMEs,” Mr McWhirter told the Yorkshire Post.

“When I hear from owners and directors of SMEs they are nervous about the future. There’s a lack of confidence.

“They are reluctant to take investment in a lot of cases.”

Finance Yorkshire’s £90m fund includes £15m for seedcorn investments in high-risk technology businesses, which are rich in intellectual property.

Mr McWhirter said the number of seedcorn finance providers in Yorkshire and Humber has shrunk from seven to two in the last 18-24 months.

“The market is desolate at this minute in time,” he added.

“There’s less money available for investment opportunities and seedcorn fund managers have retrenched into portfolio management and propping up original investments.

“It means there is less money in the market place to do investments.”

But entrepreneurs by their nature will be able to find funding elsewhere, said Mr McWhirter.

Finance Yorkshire is funded with £15m from Yorkshire Forward, £30m from the European Regional Development Fund and £45m from the European Investment Bank. It is targeting 719 investments in 580 companies to reach £90m by December 2014.

@bernardginns