Business loans in the Midlands: MEIF II, BCRS and the wider lending market
Midlands businesses can borrow through the £400 million Midlands Engine Investment Fund II, which offers smaller loans of £25,000 to £100,000 via BCRS…
Regional funding
Regional business loans in the UK: government-backed funds, CDFIs and mainstream lenders
How regional business loans work in the UK: British Business Bank funds such as NPIF II and MEIF II, CDFIs, and how they compare with mainstream lenders.
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In short
Regional business loans are loans from funds and lenders that only serve businesses in a particular part of the UK, such as the British Business Bank's Northern Powerhouse Investment Fund II, Midlands Engine Investment Fund II and the Investment Funds for Scotland and Northern Ireland.
Most offer smaller loans from £25,000 to £100,000 and debt finance from £100,000 to £2 million through appointed fund managers. They sit alongside, not instead of, the banks and alternative lenders that lend across the whole UK.
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About regional business loans UK
Where your business is based can change who will lend to it.
On top of the high street banks and national alternative lenders, most UK nations and regions now have their own publicly backed loan funds, plus local community lenders set up to back viable firms that the banks turn away. This page explains what those regional options are, how they differ from mainstream lending and how to work out which route fits your plans. Smart Funding Solutions is a broker based in Chester: we compare a panel of 300+ lenders, including several regional fund managers, for businesses anywhere in the UK.
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Explore this section
Choose the right option
Each option suits a different need. Start with the one closest to yours; we will compare the rest for you.
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Business loans in the North West: NPIF II managers, regional lenders and how to compare
North West businesses can use the Northern Powerhouse Investment Fund II, where GC Business Finance and River Capital provide smaller loans of £25,000 to…
What counts as a regional business loan?
In practice the term covers three types of lender:
- Nations and regions investment funds backed by the British Business Bank, the government's economic development bank, and run day to day by private fund managers appointed for each area.
- Community development finance institutions (CDFIs), which are social purpose lenders that focus on businesses in a defined area or community that cannot get all the finance they need from a bank.
- Regional specialist lenders, such as fund managers that also run their own local loan funds, sometimes with backing from councils or combined authorities.
The common thread is a geographic test. If your trading address is outside the fund's area, it cannot lend to you however strong the application.
Community development finance institutions
CDFIs lend to sole traders, partnerships, limited companies and social enterprises that have a sound plan but have been declined, or only partly funded, by a bank. Typical reasons include a short trading history, thin security, a past credit problem that has been dealt with, or a deal that is simply too small for a bank to want. Some CDFIs also act as appointed managers for the regional funds above, which is why the same name can appear in both lists.
CDFIs usually spend more time understanding the business and the people behind it, and many expect to see evidence that a bank has already been approached. Most still ask directors for a personal guarantee, and their decisions are not instant.
Regional guides
Each region has its own fund managers, local lenders and economic strengths. Our regional guides cover what is available now:
- Business loans in Yorkshire and the Humber, including NPIF II managers, Finance Yorkshire and FW Capital's South Yorkshire fund.
- Business loans in the North East, covering Tyneside, Wearside, Northumberland, County Durham and Tees Valley.
- Business loans in the North West, from Cheshire and Merseyside to Greater Manchester, Lancashire and Cumbria.
- Business loans in the Midlands, including the MEIF II fund managers and BCRS Business Loans.
- Business loans in Scotland, covering the Investment Fund for Scotland and Scottish lenders.
- Business loans in Northern Ireland, where several lenders and schemes work differently from Great Britain.
- For Wales, see our separate guide to Welsh business loans.
Side by side
Compare your options
How the main business finance structures work. Lenders set their own terms, so treat this as a guide to the questions to ask.
| Option | How you repay | Security | Often used for |
|---|---|---|---|
| Unsecured business loan | Fixed instalments, usually monthly | No charge over assets; a personal guarantee is usually required | Growth, stock, tax bills and cash flow |
| Secured business loan | Fixed instalments, often over a longer term | A charge over property or other assets | Larger sums, property and refinancing |
| Revolving credit facility | Interest on what you draw; repay and redraw | Varies by lender and case | Recurring or uneven cash flow gaps |
| Merchant cash advance | A share of future card takings | No charge over assets | Card-taking businesses with uneven months |
| Asset finance | Regular payments over the life of the asset | The asset being financed | Equipment, vehicles and machinery |
| Invoice finance | Settled as customers pay their invoices | Your unpaid invoices | Businesses waiting on customer payment |
General information only. Every lender has its own criteria, and all finance is subject to status.
The British Business Bank's regional funds
The British Business Bank lists its live nations and regions investment funds on its own website. The funds most relevant to borrowers are:
| Fund | Area | Fund size | Debt on offer |
|---|---|---|---|
| Northern Powerhouse Investment Fund II (NPIF II) | North West, Yorkshire and the Humber, North East including Tees Valley | £660 million | Smaller loans £25,000 to £100,000; debt finance £100,000 to £2 million |
| Midlands Engine Investment Fund II (MEIF II) | West Midlands, East Midlands and South East Midlands | £400 million | Smaller loans £25,000 to £100,000; debt finance £100,000 to £2 million |
| Investment Fund for Scotland | All of Scotland | £150 million | Smaller loans £25,000 to £100,000; debt finance £100,000 to £2 million |
| Investment Fund for Northern Ireland | Northern Ireland | Around £100 million | Loans from £25,000 to £2 million |
| Investment Fund for Wales | Wales | £130 million | Loans and equity for Welsh businesses |
The bank also runs funds for the South West, the East of England and the South East. Each fund has equity alongside its loans, usually up to £5 million, for businesses prepared to sell a stake.
You do not apply to the British Business Bank itself. Each fund appoints separate managers for smaller loans, larger loans and equity, and you deal directly with the manager for your area and deal size. Those managers make their own commercial decisions, so a regional fund is not a grant and not a soft touch: they want to see a business that can repay.
How regional funds compare with mainstream lenders
| Regional funds and CDFIs | Banks and national alternative lenders | |
|---|---|---|
| Who can apply | Businesses trading in the fund's area, often SMEs with growth plans | Businesses across the UK that meet the lender's criteria |
| Typical size | £25,000 to £2 million for most regional debt funds | From a few thousand pounds to many millions |
| Speed | Usually weeks, with a fuller assessment | From days for online unsecured loans to weeks for secured deals |
| Purpose | Growth, jobs, new premises, equipment, launching products | Almost any business purpose, including refinancing and cash flow |
| Flexibility | Can look past a short history or limited security if the plan is credible | Varies widely, from strict bank criteria to specialist lenders for weaker credit |
Regional funds often work best alongside other borrowing rather than instead of it. A manufacturer might combine a regional growth loan with asset finance for a new machine, or a bank loan supported by the Growth Guarantee Scheme. For quick, smaller amounts, national lenders offering unsecured business loans may simply be faster.
The broker’s view
How Smart Funding Solutions helps
Most business owners do not know which fund manager covers their postcode, whether their deal is the right size, or whether a mainstream lender would say yes faster. We check that for you. We look at what you need the money for, how much and how quickly, then search the market across national banks, alternative lenders and the regional lenders on our panel. Where a regional fund is the better fit we say so; where a different product works better we explain why.
It is free to enquire; any broker fee is disclosed separately before you proceed. To see which lenders could fund you, start with our Instant Quotes tool and compare options in minutes.
FAQs
Questions clients ask
Are regional business loans grants?
No. The British Business Bank's regional funds and CDFIs lend money that must be repaid with interest, and the fund managers assess affordability in the same way as any lender. Some areas also offer grants through councils or development agencies, but those are separate and usually small.
Can I apply to more than one regional fund?
Only to the fund that covers the area where your business trades. Within that fund, the right manager depends on the amount: smaller loans of £25,000 to £100,000 are handled by one manager and debt finance of £100,000 to £2 million by another in most regions. You can, however, compare a regional fund with national lenders at the same time.
Do regional funds lend to start-ups?
Some do. The smaller loan products and many CDFIs will look at young businesses with a credible plan, although they usually want some evidence of trading or committed customers. For very early businesses, the government-backed Start Up Loans programme and specialist start-up lenders are often more realistic.
Will I need a personal guarantee?
Usually, yes. Most regional loans to smaller companies are unsecured against business assets and supported by a director's personal guarantee. The terms vary by manager, so ask how the guarantee is limited before you sign.
Is a regional fund cheaper than a bank?
Not necessarily. Regional funds exist to fill gaps where banks will not lend, so pricing reflects the risk of each case. The real advantage is access: they may fund a deal a bank has declined. Comparing offers side by side is the only way to know which is better value for you.
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