Business Growth Fund is welcome but banks would be better focused on debt finance, says accountants James Cowper

The launch of a new £2.5 billion Business Growth Fund by a group of British banks is to be welcomed, but if banks really wanted to help UK PLC they should focus on providing increased access to debt finance, says Thames Valley accountants and business advisers James Cowper.

The Business Growth Fund, launched today (19 May) is backed by five banks - Barclays, HSBC, Lloyds, RBS, and Standard Chartered - working in collaboration with the British Bankers' Association. It aims to provide investments between £2 and £10 million in return for an equity stake of between 10 and 50 per cent. The Fund hopes to make up to 40 deals a year.

Nick Rogers, a partner and Head of Corporate Finance at James Cowper said: “Any new source of funding for businesses is to be welcomed. The Business Growth Fund is however entering a sector of the market that is well catered for and highly competitive. If it achieves its target of 40 deals a year it will be a volume player.

“However, many businesses in this space are not looking for equity funding; what they really need from the banks is better access to debt finance to support growth.”

Nick Rogers, partner, James Cowper LLP +44(0)1118 9590261 or email nrogers@jamescowper.co.uk

19.05.11