£24m essential finding scheme for fast-growing creative firms launched with help of Triodos Bank

October 9, 2019

Bristol-headquartered ethical bank Triodos has teamed up with Creative England to launch a £24m fund to provide vital scale-up finance to the UK’s most promising creative businesses.

The initiative, the first of its kind, aims to plug a major gap in the financing of the sector with 72% of creative businesses suffering a lack of growth capital. 

It will target post-revenue, IP (intellectual property)-rich small and medium-sized businesses that have reached a stage in their development where they require supporting finance.

Creative England, the body that aims to help develop the country’s huge creative talent and encourage inclusive growth, estimates that with the proper funding the creative industries could, by 2023, grow by 50% and create 600,000 jobs.

It already experiences high levels of demand for finance and has a strong pipeline of investment opportunities.

Since 2012, it has invested £20m while also sustaining loan repayment rates of more than 95% since 2014.

It said the new fund would serve as the first in a diverse range of investment products under its Creative Growth Finance banner, providing a comprehensive spectrum of investment facilities that will service the truly diverse requirements of businesses upholding the creative industries.

Creative England said a record 83% of businesses supported by it had succeeded over past year compared to the national average of 60%.

The creative industries contribute more than £100bn in gross value added to the UK economy, employ one in 11 workers while maintaining a status as one of the most future-proof industries. 

As a result, the fund aims to unlock the latent potential of a key economic growth engine.

Triodos Bank UK, which has been based in Bristol for 25 years, will provide £10m of the fund, with £5m from Creative England and £9m reinvested from returns over its four-year period.

The fund will offer one of the most-competitive interest rates available on the SME lending market with each loan built around a repayment structure that suits each beneficiary business.

Business loans of up to £500,000 will be available to creative firms showing potential for growth and scaling, in addition to revenue and intellectual property.

Triodos Bank UK CEO Bevis Watts, pictured above, said: “As a bank that focuses on delivering positive societal benefits through our lending, we are looking forward to seeing the impact this new fund will have on local communities and regional development.

“We’re keen that the funding reaches creative businesses all over the UK, and supports the delivery of the UN Sustainable Development Goals by reaching areas with low social inclusion and high economic exclusion.”

Creative England CEO Caroline Norbury, pictured below, described the availability of finance for small creative businesses was “notoriously inaccessible”.

“Our country’s greatest industrial asset is our people and their ideas. If we want to translate from ambition to bottom line growth, then continual investment is a must,” she said. 

“Access to transformative risk capital to enable creative entrepreneurs to evolve from small businesses to scaleups that can add value to UK PLC, hinges on the ability to access a level of finance that is – in its current state – notoriously inaccessible.

“The launch of this fund ensures a shift in the ecosystem for lending across the creative industry. Beyond the finance itself, Creative England’s national support-network differentiates the launch from a traditional loan facility into an opportunity to access expertise and counsel and connect to the relevant networks that sustain businesses at the cutting edge of their craft.”

Creative England chief finance officer Mehjabeen Patrick said the traditional lending structure was “hugely risk averse” and had led to a major funding gap for the creative sector.

“Imminent change is required to catalyse growth at what is a critical stage of leap-finance,” she said.

“The creative industries contain a myriad of viable investment opportunities, and for those with the expertise and knowledge to take advantage, we’re hugely excited to champion this much-needed initiative.

“Our regional focus and knowledge of the creative industries will undoubtedly allow many firms to access funding, that up until this point was unattainable or the preserve of non-creative sectors.”

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