North East Fund helps secure £10m for SMEs during lockdown
A determination to keep supporting regional companies and continue aiding business growth despite the current challenges has seen the North East Fund help local SMEs secure £10m of funding since the start of the lockdown period.
More than £4m has been invested by the North East Fund in 25 companies since mid-March, and this has also helped to secure a further £6m of support from other investors.
The investments have meant that SMEs from different sectors are now successfully navigating the economic downturn and in some cases, increasing sales and productivity due to an urgent shift in demand for their products and services.
With several high-profile manufacturers also announcing a gradual return to production over the coming weeks, the North East Fund is remaining optimistic that SMEs operating in manufacturing and supply chain industries who originally feared for their future, are adapting well and finding new markets and methods of working.
Jason Hobbs, CEO of the North East Fund explained, “These are hugely difficult times for the region’s businesses, and we expect the environment to remain challenging for some time to come. However, we’ve also seen glimmers of hope and a rise in demand for several of our investee companies’ products and services, like at Hive. We have done everything we can to keep funds flowing and support these businesses when they’ve needed investment to help serve their clients.
“The North East Fund was created with support from the European Regional Development Fund to provide growth capital for SMEs that could not secure the funding required from banks or private investors to finance their plans, and that is the role that we continue to fulfil here in the North East ecosystem.
“We unfortunately can’t provide the short term working capital or bridging loans that companies may need currently, but we and our fund managers can help companies to identify and access the most suitable government and local authority schemes. Our funds may be able to help those who receive Bounce Back or CBILs loans but need additional finance to sustain and then hopefully grow their business once again.
“As we start to come out of lockdown, the North East Fund will continue to invest in start-up, early stage and more established businesses, and support those which are now meeting the changing needs of the economy.”
Investee company, Hive, a provider of cloud-based employee feedback software, is one of several organisations which, over the past few weeks, has seen a surge for its employee survey tools, real-time reporting features and staff engagement services.
Employing 52 staff in Newcastle upon Tyne, the company received a second round of investment in February 2020 via the Development Capital Fund. It is successfully serving new and existing clients with an urgent need to communicate and engage with their staff remotely on all HR management issues as a direct result of Covid19.
Hive CEO, John Ryder, commented, “Despite the crisis, we’ve been lucky in that we’re one of those businesses that has actually created more opportunities due to the need for employee feedback right now. We’ve been able to rely on our agility and have developed additional features specifically for customers who have never had to communicate with people remotely before, or indeed, whose employees may ordinarily, have no access to work computers, like many blue collar workers.
“For example, we’re helping our clients to customise one of Hive’s ‘always-on’ listening tools to become a channel for staff to raise immediate thoughts, concerns and recommendations in response to the crisis.
“Dealing with major change, especially that which is forced upon us, is tough for anyone, and there is no easy route out of this for the region or indeed the country. However, all we can do is remain positive, keep moving forward together, adapt to the needs of our customers and embrace the new working environment.”