IT'S well known that there are many challenges involved in setting up or growing a business. and over the last 10 years gaining access to the necessary finance to support the growth of a business has become increasingly difficult.
During my four year term on Invest NI’s Access to Finance Working Group I witnessed the hard work that is done to support local SMEs to grow.
For a small business, having access to the right kind of finance is immensely important. It can mean the difference between being able to purchase new machinery and employ new staff, or invest in innovation and new product development.
Invest NI’s Access to Finance funds were created to help companies struggling to access the necessary finance to grow their businesses. The six funds initially provided £134million of debt and equity funding for SMEs, and over my term I was delighted to oversee the total amount available for investment increase to £184million.
Although it is too early to fully assess the economic impacts of the funds as it is a long term strategy, it's clear they have already generated substantial benefits for the Northern Ireland economy.
In the first seven years, £124 million of finance has been offered to over 750 businesses across Northern Ireland, helping create jobs, win exports and invest in R&D.
For example, Cirdan Imaging has used the funds to become a significant employer in Northern Ireland while Rockcastle Ltd has created an additional 43 new jobs since its original Growth Loan Fund investment in 2014, with plans to create another five new roles over the next few months.
Nearing the end of its five year investment period, the NI Small Business Loan Fund has invested over £7m of support to more than 300 businesses. This has helped those enterprises create over 144 jobs and generate more than £26m in sales.
Interest in the Crescent III and Bank of Ireland Kernel Capital Growth Fund (NI) has been high over the last number of years. These development funds have offered over £19m of equity funding, supporting businesses to develop new products, target new markets and strengthen their management teams.
One local business which has seen great success from the Bank of Ireland Kernel Capital Growth Fund is Belfast-based provider of enterprise software solutions, Automated Intelligence Ltd, which recently raised £1.5 million to help fund a drive of exports into global markets. The investment comprised of £1m from the Fund, with the remainder provided by an existing private investor.
The company is using the investment to market its world-leading products and services to international organisations of all sizes who need to achieve GDPR compliance. It is encouraging to see companies like Automated Intelligence use the fund to drive exports in global markets.
The £50m Growth Loan Fund was launched in 2012 and in the past five years has assisted over 120 businesses. Local companies such as Ballinderry-based Conveyortek used a loan secured from the fund to enable it to create six new engineering jobs and establish a second 6,000 sq ft production site as part of a sustainable three-year expansion plan.
Support from the Growth Loan Fund also helped Newry-based Healthy Buildings to secure a £500,000 loan which it has used to create 10 new jobs and support the group’s BlueZone Technologies subsidiary, to further develop and market its innovative ‘manager’ software platform.
TechStart NI was launched in 2014 to provide funding for early stage technology business and university spin-outs. This fund is providing much needed seed capital to support businesses to accelerate the development of their products. It has already invested in 35 start-up and early stage technology companies and has provided proof of concept grants for over 170 innovative business ideas.
The biggest financial successes I witnessed during my term came from Co-Fund I, with Path XL and Ingresso being successfully sold, generating a return of over double the initial investment. PathXL, a digital pathology technology company, was sold to the global Dutch head-quartered company Philips and Ingresso, a ticketing technology business, was sold to Berkshire-based Accesso.
Together, these investments have already realised a financial return of £2.4m against an investment of £900,000. The first Co-Fund invested over £12m, proving it to be one of the most active sources of venture capital in Northern Ireland.
Invest NI’s Access to Finance funds are enabling more businesses to grow, encouraging entrepreneurship and helping to rebalance and rebuild our economy by driving private sector growth. This has helped to create jobs, bring new products to market and help companies realise their growth ambitions. Local businesses who are struggling to access the finance they need to progress can explore their options further by contacting Invest NI’s business support team on 0800 181 4422.
