The British Business Bank has committed £40m to Frontier Development Capital’s new £81.5m Evolution Fund to support the growth of smaller businesses in the Midlands and the North of England.
The Evolution Fund will provide flexible debt solutions of between £1m and £8m to established smaller businesses in any sector with proven business performance, growth potential and a strong management team.
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The funding can be used to support transactions including management buyouts, acquisitions, shareholder reorganisations and debt refinancing, as well as provide growth capital or help firms work towards achieving carbon net zero.
The Evolution Fund is the second Frontier Development Capital (FDC) debt fund to be backed by the British Business Bank.
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“We are pleased to continue our support for FDC, having previously backed the FDC Debt Fund in 2020. The British Business Bank is committed to increasing the supply and diversity of finance for smaller businesses,” said Adam Kelly, managing director and co-head of funds at the British Business Bank.
“Despite the variety of debt providers in the market, it is still difficult for smaller firms to secure capital as many funders are unwilling to lend sums of under £10m or to support transactions involving SMEs,” added Graham Mold, head of growth capital at FDC.
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“The Evolution Fund reinforces FDC’s commitment to regional businesses often underserved by traditional lenders.”
It comes after the British Business Bank recently increased its commitment to DunPort Capital Management to £90m to provide smaller business with flexible debt capital solutions.
