British Business Bank regional funds back 877 firms, review finds

The British Business Bank regional funds had made 951 investments in 877 businesses by September 2025, investing £294 million and drawing £233 million of private money alongside, according to an early assessment by SQW published on 13 October 2026. The evaluator found the programme is performing well and operating broadly as intended.

Regional high streets and workshops are where the funds' first institutional cheques land.

The six funds are Northern Powerhouse Investment Fund II, Midlands Engine Investment Fund II, the South West Investment Fund, the Investment Fund for Scotland, the Investment Fund for Wales and the Investment Fund for Northern Ireland. Each has a five-year investment period followed by a five-year realisation and repayment period, so the review captures the funds early in their lives.

The practical reading is that the evidence supports these funds as a source of first institutional money for founders outside London, and does not yet show what happens to those businesses afterwards.

What SQW found across the Nations and Regions Investment Funds

SQW, an independent research company, reported that 81 per cent of surveyed businesses said they would have been unable to get finance without the funds, would have received less, or would have received it over a longer timeframe. Of equity recipients, 57 per cent were securing institutional finance for the first time.

The sector mix is broad. Manufacturing accounted for 15 per cent of supported firms, information and communication for 14 per cent, and professional, scientific and technical activities for 13 per cent. Half of all businesses increased research and development activity, supported by about £45.5 million of additional R&D investment.

What the private leverage ratio shows

Private leverage is the amount of private investment that arrives alongside each pound the funds invest. On the September 2025 figures, £233 million of private money against £294 million invested gives £0.79 per £1.

The same figures imply an average of about £309,000 per investment and about £335,000 per business, since some businesses received more than one investment. The release also cites programme data to July 2026 that SQW did not evaluate: over £465 million invested in 1,254 businesses, with £417 million of private investment attracted. On those numbers the ratio is about £0.90 per £1, invested capital is up £171 million (58 per cent) and the business count is up 377 (43 per cent) since the evaluation cut-off.

Two cautions apply. The July 2026 figures are outside the evaluated period and may not be measured on the same basis. The 81 per cent additionality figure also lumps together businesses that could not raise at all, raised less, or raised later.

What founders outside London should take from the review

The money reaches founders through regional fund managers, such as PXN Equity Finance for NPIF II, so a founder's first conversation is with the manager of the fund covering their region, not with the bank. On average a £1 cheque has arrived alongside about 79p of private money, so a founder should expect to be asked who else is in the round.

As we covered recently, the bank's other recent early-stage commitments include its £10 million commitment to Fuel Ventures and its backing of the Living Optics round.

Public support for early-stage equity also runs through tax reliefs, covered in the earlier piece on SEIS and EIS ahead of the 28 October Budget.

The questions to put to a fund manager are how long the investment period has left to run, what proportion of its cheques go to first-time institutional recipients, and what co-investors it expects.

Key takeaways

• The British Business Bank said on 13 October 2026 that SQW's early assessment found six regional funds had made 951 investments in 877 businesses by September 2025.

• Those funds invested £294 million and drew £233 million of private money, a private leverage ratio of £0.79 for every £1 invested.

• 81 per cent of surveyed businesses said that without the funds they would have been unable to get finance, got less, or got it later, which is a self-reported measure.

• Programme data to July 2026 cited in the release show over £465 million invested in 1,254 businesses, outside the evaluated period.