The North East Fund will offer different types of equity investments and loans to firms looking to drive local growth, investment and job creation in the area.
The fund agreement has been signed by seven local authorities in the North East as well as North East (SPV) Limited and the Department for Communities and Local Government (DCLG).
The fund combines the European Regional Development Fund backing with European Investment Bank finance as well as legacy money generated by the North East Local Enterprise Partnership (LEP).
Andrew Hodgson, chairman of North East LEP, said securing the fund was fantastic news and the result of months of hard work.
“The agreement signed today with government ensures the fund stays in the North East to back the investment plans of our fastest-growing, brightest firms.
“It is a prime example of public sector partners working together to achieve maximum return for the North East economy.”
The fund is expected to support 600 businesses and create around 2,500 jobs in the next five years.
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“Businesses need access to finance because it helps them to plan ahead, to grow and expand, and to create jobs and economic growth in the North East,” said councillor Paul Watson, chair of the North East Combined Authority.
Andrew Mitchell of the Project Team charged by North East LEP with delivering the fund said this was a vote of confidence for the North East.
“The commitment of North East LEP, the seven local authorities and government to delivering a regional fund has been crucial in unlocking this programme.”
Stephen Lightley, chief executive officer of North East Access to Finance Limited, concluded: “It is great news that government approval has been secured for the North East Fund and that the North East LEP’s share of the financial legacy of the public sector SME investment funds that invested from 2003 to 2009 is providing a key element of the finance for the new fund.
“It was always the vision of local stakeholders that returns from these older funds would be redeployed into future funds and now it is being achieved.”