COVID-19 RECOVERY: £15m boost for small businesses
Jamie Driscoll, Labour's North of Tyne mayor, Image: NCJ Media
Small business owners in the North East could get a share of a new £15m pledge to boost the region’s recovery from Covid-19.
Entrepreneurs based in Newcastle, Northumberland, and North Tyneside are set to be given access to new investment from the North of Tyne Combined Authority (NTCA) to help start or grow their companies.
North of Tyne mayor Jamie Driscoll said the spending promise “has the heft required to make a real difference”.
Applications for the funds are expected to open some time next year, though it is unknown how much money businesses will be allowed to apply for or exactly who will be eligible.
The NTCA said the cash, approved in September, would be split between £10m of equity investment to “ensure that the most innovative companies are able to access the funding they require to grow as the economy recovers from the pandemic” and another £4m for enterprises or employee-owned firms tackling social and environmental problems.
The remaining £1m will be spent helping local businesses maximise take-up of existing finance already being offered.
Mr Driscoll said he hoped the money would “give people of ordinary means a chance to be their own boss”.
He added: “It has the heft required to make a real difference. There’s £10 million in the package for equity investment – a challenge the North East faces.
“Although we account for 2.3% of the UK economy, only 1.4% of the total UK private equity and venture capital is invested here. By having a fund to directly invest in small, local firms, start-ups and scale-ups, we can accelerate the economic recovery.
“As the fund grows, the money will be recycled, supporting more local firms, and creating more jobs here.
“For cooperatives, and businesses trading with a social purpose, it’s even harder. Investors expect a vote in your business, and the legal structure of worker-owned or community-owned businesses often prevents that. So we’ve made £4 million available to directly invest in these businesses, as a source of patient capital to help them grow.”
Words: Daniel Holland, Local Democracy Reporter
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