£20 million Wales Capital Growth Fund will help Welsh SMEs target larger contracts
A new £20 million fund that will provide Welsh small and
medium-sized businesses (SMEs) with the backing they need to bid
for larger contracts has been announced today by Economy Minister,
The Wales Capital Growth Fund, which has been
funded by the Welsh Government and will be managed by Finance
Wales, has been created in response to demand from Welsh SMEs for
finance for a range of short-term working capital and performance
Welsh SMEs will now be able to apply for loans
of between £50,000 and £2 million for terms of up to 18 months from
the five-year fund. It aims to help up to 90 SMEs and it is
anticipated it will potentially create and safeguard around 1000
jobs over a five-year period.
The Fund will facilitate stock purchasing,
project finance and also provide short-term loans to SMEs to
provide cash collateral to support performance bonds issued by
banks for domestic and export contracts.
The ‘evergreen’ fund will operate on a
commercial basis and, by recycling investment returns, has the
potential to make finance of up to £60 million available over five
years. It will complement other funds managed by Finance Wales,
such as the Wales JEREMIE and SME Investment Funds, which make
long-term growth investments.
The Minister said:” The Fund demonstrates the
Welsh Government’s commitment to encouraging business growth and
meets a funding gap identified by Finance Wales.
“It will provide much needed access to finance
for SMEs that cannot currently access working capital and bonding
finance from the banking market. Many Welsh businesses have the
capability and capacity to secure new contracts and now, thanks to
the Wales Capital Growth Fund, they can also finance the working
capital they need or the performance bonds that are often
Loans from the Wales Capital Growth Fund can
be used for a range of short-term funding needs often associated
with larger contracts. This can include one-off debtor
finance, stock purchases and project finance as well as to provide
security for advanced-payment, performance and warranty bonds.