The Growth Fund

The Growth Fund is a £4.5 million programme of investment part-funded by ERDF that supports Small Medium Enterprise Growth (SME) growth. You could be eligible for a grant of up to 30% of expenditure, if you are planning capital investment of at least £67,000 and expanding or establishing in Gateshead, South Tyneside or Sunderland.

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Summary

The Growth Fund is a £4.5 million programme of investment part-funded by ERDF that supports SME growth across Gateshead, South Tyneside and Sunderland local authorities.

The primary aim of the Fund is to create employment and stimulate business growth. It will foster innovative processes to drive productivity, resulting in increased profitability, wage growth and employment growth in SME’s, strengthening our economy and creating better jobs.

The Fund will attract £10.5 million of private sector investment and aim to create a minimum of 252 new jobs in the area.

Eligibility

The Growth Fund is a £4.5m programme of investment part-funded by ERDF that supports SME growth. You could be eligible for a grant of up to 30% of expenditure, if you are:

  • a small or medium size business (SME – employing fewer than 250 employees and with an annual turnover of less than €50 million or an annual balance sheet less than €43 million)

  • planning a capital investment of at least £67,000

  • expanding or establishing in Gateshead, South Tyneside or Sunderland

  • Planning an eligible project. The following activities are not eligible for this Fund:

    • Provision of local social welfare facilities e.g. hospitals, hospices, nursing homes, fire stations, child-minding facilities, sports facilities, parks, public libraries.

    • Building and renovation of housing.

    • Infrastructure in port facilities.

    • Provision of public services or activities to supplement public services e.g. social housing, school age education.

    • Planning an investment involving eligible expenditure (see below for details) of at least £67,000 to expand existing operations in Gateshead, South Tyneside or Sunderland or establish new operations in one of these three local authority areas, leading to the creation of additional employment in the area.

  • Planning to create additional employment commensurate with the level of grant awarded (guideline: 1 net additional full-time job per £10,000 of grant).

  • Able to cash-flow the entire investment, as grants are paid in arrears. Grants may be paid in instalments, based on eligible expenditure incurred and defrayed.

  • Able to finance the balance of the investment cost, as the grant cannot finance more than 30% of the eligible cost. Small companies (less than 50 employees, see SME definition above) may apply for up to 30% of their eligible expenditure and medium-sized companies up to 20%, in accordance with the State aid Regulations. The grant must be the minimum necessary for the investment to go ahead (see below).

  • Able to complete the investment, including incurring and defraying enough eligible expenditure, by 31 May 2023.

  • Able to achieve the agreed increase in employment by 31 May 2023.

  • Able to maintain the additional productive capacity created by the investment for a minimum of 5 years following the completion of the investment; and:

    • where the grant is used to purchase premises, these must be retained for a minimum of 15 years; 

    • capital works on a site owned by the grantee must also be maintained for a minimum of 15 years; 

    • where the grant is used to acquire premises under a lease, these must be retained for a minimum of 5 years; 

    • capital works on a leased site must be maintained for a minimum of 10 years;

    • plant, machinery and all other tangible assets must be maintained for a minimum of 5 years.

  • Able to maintain the employment created by the investment for a minimum of 3 years following the creation of the posts.

  • Able to show that the investment would not lead to the displacement of economic activity or employment in other businesses in the area.

What types of expenditure are eligible? 

  • Grant support may only go towards capital expenditure to which no legally binding commitment has been made and which leads directly to the expansion of an operation or the establishment of new operations in Gateshead, South Tyneside or Sunderland. 

  • ERDF procurement rules apply to all expenditure. 

  • Eligible expenditure may include any of the following items: 

    • Land and buildings (land costs cannot exceed 10% of the total eligible investment cost, and professional fees should not exceed 12.5% of the total eligible works cost) 

    • Premises lease costs 

    • Premises fit-out costs 

    • Plant, machinery and other capital equipment

    • Revenue costs directly associated with a capital investment, where eligible under ERDF rules (e.g. professional fees, installation costs etc.)

Additionality criteria:

  • The minimum grant that may be applied for is £20,000 and the maximum will normally be £200,000, unless the applicant can demonstrate that the project would create exceptional impact.

  • The amount of grant applied for must be the minimum necessary for the investment to go ahead. Applicants must be able to demonstrate either that they have exhausted all alternative sources of funding or that there is a credible reason why other finance such as a loan or equity investment could not be used instead of a grant. 

  • Grants may only be awarded where there is credible, verifiable evidence of one or more of the following:

    • That the investment would not go ahead without grant support.

    • That the investment would not go ahead at the scale proposed without grant support.

    • That the investment would not go ahead within the timescale of this programme (1 September 2020 to 31 May 2023) without grant support.

    • That the investment would not take place in the area without grant support.

Objectives

The primary aim of the Fund is to create employment and stimulate business growth. It will foster innovative processes to drive productivity, resulting in increased profitability, wage growth and employment growth in SME’s, strengthening our economy and creating better jobs.

Dates

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How to apply

For further information or to apply contact 

UMi: T: 0191 716 1010 

E: thegrowthfund@weareumi.co.uk

W: www.thegrowthfund.co.uk

  • SME makes initial contact with the Growth Fund through the online contact form, email address or telephone number. After an initial telephone conversation with UMi, where basic eligibility checks are conducted, eligible clients will be sent an Expression of Interest form to complete and return via email.

  • Once an Expression of Interest has been received by UMi, an initial client meeting will be arranged with a Project Adviser to discuss eligibility and to identify any additional external support that may be of help to the client.

  • If the SME has a suitable investment project, the Project Adviser will invite a grant application. Application form and associated application documents are provided to the SME to complete along with guidance notes.

  • Client submits application form to UMi (Project Advisors can support the client throughout the application process. Clients can also employ the services of external grant application specialists if required).

  • Grant application is appraised by UMI and prepared for submission to Investment Panel.

  • Application presented at bi-monthly panel meeting for approval. The panel is made up of representatives from private and public sectors.

  • If successful at panel, due diligence is undertaken by an external provider who will provide a report to UMi and Gateshead Council.

  • Applications that are rejected by the Investment Panel can be re-submitted in the following circumstances only:

  1. The Project has changed fundamentally, or

  2. There is new information available which materially alters what was presented to the Investment Panel

  • UMi Executive makes final decision on whether to offer the grant, grant amount and on what terms.

  • Final approval communicated to SME and Grant Offer Letter issued. Once signed and returned by the applicant, the project may commence.

  • SME must follow ERDF procurement rules before any purchases can be made. Further information can be found here.

  • Once eligible purchases have been made, a grant claim can be submitted.

  • The claim will be assessed for completeness and accuracy. Payment will be released within 30 days of UMi receiving all required information.

  • Click here to view a flowchart of the application process.

Supporting information

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