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Enterprise Capital Funds

Enterprise Capital Funds (ECFs) address a market weakness in the provision of equity finance to SMEs by using Government funding alongside private sector investment to establish funds that operate within the ‘equity gap’. An equity gap arises where businesses with viable investment propositions are unable to attract investment from informal investors or venture capitalists. In bridging this gap, ECFs aim to alleviate what would otherwise present a significant barrier to enterprise and to productivity growth. Nine such funds have been launched since 2006.

On 1 April 2008, responsibility for the management of ECFs along with BIS’s other equity funds and the Small Firms Loan Guarantee (SFLG) was transferred to a new body, Capital for Enterprise Limited (CfEL]. This was aimed at improving the selection and management of the funds, but did not change the nature of the funds or their policy objectives. Additionally, CfEL are now responsible for the management of the Enterprise Finance Guarantee (EFG).

Enterprise Capital funds replace previous products such as the Regional Venture Capital Funds, which are now closed for new applications.

Current Status

There is an ongoing process for allocation of Government investment in ECFs. Guidance and information for organisations interested in being selected to manage an Enterprise Capital Fund is accessible at the Capital for Enterprise website.