Today 18 October sees the official opening of The Development Bank of Wales. Created by the Welsh Government, the new development bank will make it easier for businesses to get the capital they need to start-up, strengthen and grow.
It launches with the new £100 million Wales Flexible Investment Fund, more micro finance available and extended lending terms. In total, the Development Bank of Wales has around £440 million available to invest in Welsh business.
The Wales Flexible Investment Fund will invest more and over longer periods than existing funds, offering up to £5 million in a single round and repayment terms of up to ten years.
Through the development bank, the Welsh Government is also trebling the amount of micro finance available from £6 million to over £18 million, with further funds also being developed.
With the Welsh Government’s Help to Buy – Wales scheme and private sector investment the £440 million more than doubles and over the next five years, the development bank is targeted to have an impact of over £1 billion on the Welsh Economy. As a result, it is expected to support 1,400 businesses with those businesses creating and safeguarding more than 20,000 jobs.
Economy and Infrastructure Secretary, Ken Skates said, “I am delighted we have been able to quickly progress Welsh Government’ plans to establish the Development Bank of Wales.
"The bank will use Welsh Government funding to support investments that will help grow Wales’ economy both today and into the future and provide businesses with the support they need.
“As our businesses thrive and repay the loans, that money will be re-invested meaning that the capital doesn’t just help businesses succeed now, it funds the next generation of Welsh success stories too.”
Giles Thorley, Chief Executive of the Development Bank of Wales said, “99% of all businesses across Wales are micro to medium size. They account for 60% of all private sector employment. As businesses face the uncertainty of Brexit, the need to provide stability and stimulate growth is more immediate than ever.
"For Welsh businesses the changes mean that there is more finance available to support them no matter what their stage of business. Micro, small and medium businesses are vital to the Welsh economy and we are proud to have worked with so many ambitious and dedicated entrepreneurs. The message to Welsh businesses is simple: get in touch. We’re here to help your business succeed”
Businesses such as Hilltop Honey, initially took a micro loan in 2014 and came back for further investment in 2017. The support has allowed their business to flourish - moving to bigger premises, creating jobs and successfully listing their products on supermarket shelves at Tesco, Sainsbury’s and the Coop.
Former rugby internationals Scott Morgan and Barry Davies applied for a micro loan in 2012 to set-up Nutrivend alongside investment from business angels. The company which specialises in health and nutrition vending machines has since successfully applied for follow-on equity investment enabling the business to go from strength to strength.
Scott Morgan, Managing Director of Nutrivend said, “It’s been a really exciting journey. Since we set up Nutrivend and received our initial finance, we have grown the business from when it was just me to 20 staff. We now have depots across the UK.
"We’ve had both debt and equity investment which has been fundamental to our ability to grow the business. Without investment, it gets to the point where you battle on, on your own and try to do the best you can. Or you embrace the opportunities that are there to support you. I know I’ll look back in ten years’ time knowing the business has had every opportunity to succeed.”
Offering loans and equity investments which can be paid back over periods of up to ten years, the development bank will offer a wide range of investment, from £1,000 up to £5 million.
Read our guide on Brexit rules and how they affect you as a business.
Businesses across Wales can find out if they are eligible online. With over 40 executives across Wales, you’ll be matched with a dedicated, local representative who understands your business needs.