Fund ready to start investing millions in companies

The venture capital and loan fund said it will begin investing in companies across Yorkshire and Humber after receiving the delayed 45m from the European Investment Bank.

Finance Yorkshire, which was launched in March, had already secured 45m from the European Regional Development Fund (ERDF) and Yorkshire Forward but, as part of the deal, needed European Investment Bank to match the funding to secure the full 90m for Yorkshire's businesses.

The organisation aims to provide seedcorn, loan and equity linked investments, ranging from 15m to 2m, for small and medium businesses.

Fund managers started processing the applications while the funding was being finalised.

Concerns were raised last week after it emerged that more than 95 per cent of applications for loans have been rejected, but chairman James Newman said the figures were skewed by the application process for the seedcorn fund, which logs inquiries as applications.

"The seedcorn fund focuses on high-technology type businesses and ones where the management and technology is reasonably well advanced," he said.

"The ideas that were rejected were the ideas we either judged not to work, where there is already a large amount of competition, the ideas are too expensive or where they need more development."

Mr Newman said funding is initially expected to be rolled out to about 16 businesses across the three funds in the next six to eight weeks.

The fund will be invested over the four years to 2014. From that point, Finance Yorkshire expects the realisation of successful investment to help create an evergreen legacy fund of about 50m by 2019.

In total, it is estimated that the fund will help to create or safeguard almost 6,000 jobs and create 602m of gross value added for Yorkshire's economy.

Mr Newman said: "We have received hundreds of applications from businesses during the last few weeks, but we continue to urge more companies, who are looking for finance to grow and develop to get in touch with us."

For more information, visit www.finance-yorkshire.com or ring 0845 649 0000.