The FSE Group has launched the Future London Growth Fund, a new debt fund designed to support the growth of ambitious scale-up businesses across London’s 32 boroughs and the City of London.
The Fund is backed by cornerstone commitments from the British Business Bank and the Mayor of London’s investment arm, Funding London. Through its investment entity, GLIF Limited, Funding London has invested in the Fund as part of the Mayor of London’s ambition to support economic growth through the London Growth Plan.
The Fund expects to deliver more than £70 million of lending and is targeting founders and businesses that may be overlooked or underserved by traditional finance providers.
While London is home to one of the world's leading financial centres, many smaller businesses across the capital still face gaps in access to growth finance. According to a report by the British Business Bank, entrepreneurs operating in economically deprived urban areas can face additional barriers to finance and business success, despite being located close to established investment ecosystems.
The report found that London was the toughest place in the UK to be an entrepreneur, with 71 per cent of business owners reporting a profit, compared with the UK average of 84 per cent.
The Fund aims to address these challenges. Offering loans ranging from £1 million to £3 million, it is intended to address the gap between bank finance and larger-scale venture debt and will support companies with strong commercial traction and credible plans to scale.
FSE has supported London businesses through the management of the £66m debt portion of Funding London’s Greater London Investment Fund since 2019. FSE also manages part of the British Business Bank’s South West Investment Fund, Investment Fund for Scotland and Midlands Engine Investment Fund, and was recently appointed manager of the South East Investment Fund (Debt).
The Mayor of London, Sadiq Khan, said:
“London is the best city in the world to start and grow a business, but too often many are overlooked by traditional finance providers.
Delivering millions of pounds of support, the Fund will enable businesses to innovate and expand, bringing lasting economic impact as we continue to build a better, more prosperous London for everyone.”
FSE CEO Julie Silvester said:
“Providing flexible, relationship-led capital gives ambitious management teams the freedom to innovate and create high-quality jobs.
The Future London Growth Fund is a direct continuation of that ethos, providing the tailored support scaleups need to execute their next phase of expansion.”
According to Adam Kelly, Managing Director, Debt and Regional Funds at British Business Bank, it's easy to assume businesses in London have access to all the finance they need, but that isn't the reality for many ambitious founders across the capital.
“Smaller businesses operating in underserved communities, or those without established investor networks, can still struggle to secure the growth capital they need to scale.
Our £20 million cornerstone commitment to the Future London Growth Fund will help address that gap, increasing the availability of finance for businesses with strong growth potential and supporting economic opportunity across London's diverse communities."
Lead image: FSE Head of London Funds Kala Desai and CEO Julie Silvester.