Invest NI’s Access to Finance portfolio spurs growth in local businesses
Mike McKerr, EY Managing Partner Ireland, was a co-opted member of Invest Northern Ireland’s Access to Finance Working Group from April 2013 to May 2017. Mike speaks about how Invest NI’s Access to Finance funds (PDF) are helping businesses access the capital they need to ensure sustainable growth.
It is well known that there are many challenges involved in setting up or growing a business and over the last ten years gaining access to the necessary finance to support the growth of a business has become increasingly difficult.
During my four year term I witnessed the hard work that is done by Invest NI to support local SMEs to grow, most specifically through its Access to Finance funds.
Supporting local businesses through Access to Finance
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. Over my term I was delighted to oversee the total amount available for investment increase to £184million.
In the first seven years, £124million of finance has been offered to over 750 businesses across Northern Ireland helping create jobs, win exports and invest in R&D.
Although it is too early to fully assess the economic impacts of the funds as it is a long term strategy, it is clear that they have already generated substantial benefits for the Northern Ireland economy. In the first seven years, £124million 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 and 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 £7million of support to more than 300 businesses. This has helped those enterprises create over 144 jobs and generate over £26million 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 £19million 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, who recently raised £1.5 million to help fund a drive of exports into global markets The investment comprised of a £1million investment 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 £50million Growth Loan Fund was launched in 2012 and in the past five years has assisted over 120 businesses with almost £50million of funding. Local companies such as Ballinderry based Conveyortek used a loan secured from the Growth Loan 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.- Mike McKerr, EY Managing Partner Ireland
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 £2.4million against an investment of £0.9million. The first Co-Fund invested over £12million, 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. My advice to viable local businesses who are struggling to access the finance they need to progress is to explore their options further with Invest NI’s help and contact its Business Support Team on 0800 181 4422.
Techstart NI, Co-Fund NI and the Development Funds are part financed by the European Regional Development Fund under the EU investment for Growth and Jobs Programme 2014-2020.