Cornwall and Isles of Scilly Investment Fund

The Cornwall and Isles of Scilly Local Enterprise Partnership (LEP) has worked in partnership with the British Business Bank to create the £40 million Cornwall and Isles of Scilly Investment Fund for the CIoS LEP area.

The fund provides loans and equity investments (rather than grants) from £25,000 to £2 million to help local businesses grow and create jobs.

 

A public funding package of circa £40 million has been put together, with funds from the LEP, Government and the EU Growth Programme to establish the CIOSIF. The Government-owned British Business Bank will operate the fund for the first 10 years.  The fund is anticipated to unlock at least a further £40 million from private investment.   This will create a revolving investment fund to which businesses can apply for start-up and growth investment in perpetuity.

 

What is it?

  • Circa £40m (ERDF, Growing Places and BEIS) creating a fund providing debt and equity for growing SMEs in Cornwall and the Isles of Scilly
  • Investment and lending aimed at creating sustainable economic activity through supporting new and growing businesses
  • The opportunity to build a legacy for the region from successful investment and lending
  • The Government-owned British Business Bank will set up and operate the fund for the first 10 years

 

Why? (Market need)

  • Market gap in the provision of debt and equity finance in CIoS
  • Access to finance as a much higher barrier to growth than the English average
  • An equity gap in start-up, early stage and development capital
  • High growth businesses unable to obtain finance from traditional sources with potential demand estimated to be approximately £61-£91m over the ERDF funding period
  • 1% of all UK SMEs v 0.1% of all UK equity deals

How?

Investment Strategy – Debt

To make debt finance available to growing businesses in CIoS that are unable to access debt finance from commercial sources due to a lack of collateral or track record, but have a viable business proposal

  • 50% of the Fund is in the form of debt finance (approx £20m)
  • Loans between £25,000 and £1m
  • The Fund Manager will seek co-investment on a deal by deal basis
  • Flexibility to move funding from debt to equity and vice versa if economic circumstances change and/or the fund’s performance justifies or requires

 

Investment Strategy – Equity

To make equity finance available to growing companies in CIoS that are unable to access equity finance

  • 50% of the Fund is in the form of equity (approx £20m)
  • Equity funding between £50,000 and £2m available
  • There will be some restrictions on the number of larger equity investments to ensure a spread of investments and to deliver ERDF output targets
  • The Fund Manager to seek co-investment on a deal by deal basis
  • Flexibility to move funding from equity to debt and vice versa if economic circumstances change and/or the fund’s performance justifies or requires

For more information please visit the CIOSIF website