Finance Wales Invests PS31m in Nation's Small Companies; SHARP RISE IN DEMAND FOR MICRO LOANS BY NEW FIRMS

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Byline: SION BARRY sion.barry@walesonline.co.uk

FINANCE WALES invested PS31m into Welsh SMEs in its last financial year.

While the Welsh Government wholly-owned subsidiary is still in the process of auditing its accounts for the year to the end of March 2013, it said the value of its financing to support growth-focused SMEs, in the form of debt, mezzanine and equity, was up 20% on the previous year.

However, funding from its PS150m Jeremie Fund was down on the previous year from PS26m to PS22.6m - partly as a result of business confidence being hit by uncertainty in the eurozone.

The Jeremie Fund includes PS60m of non-repayable funding from the European Regional Development Fund (ERDF) and repayable finance of PS75m from the European Investment Bank (EIB), as well as PS15m of Finance Wales' own funds.

Alongside the Jeremie Fund, Finance Wales made its first investments from the Wales SME Investment Fund, which it manages on behalf of the Welsh Government.

During the year it invested PS8.5m from the fund, which is backed with PS20m from the Welsh Government and matched funding from Barclays.

When finalised the accounts are expected to show Finance Wales making a pre-tax loss as a result of provision for bad debt.

From its Jeremie Fund it made debt investments of PS11m, with PS11.6m in equity.

During the year its mix of new and follow-on investments at all growth stages, leveraged an additional PS22m investment in Welsh SMEs - which have benefited from PS256m of investment from Finance Wales since it was established in 2001.

Its direct investment has also leveraged PS434m of additional investment, taking its total impact on the Welsh economy to PS690m.

Demand for loans of up to PS25,000 (micro loans) more than doubled during the year and investment in start-up and early-stage businesses increased by 80% as Finance Wales invested PS9m in high-growth, IP-rich technology-based businesses. The company also exited from five of its equity investments, achieving its largest equity realisation to date with a 2.4 times return on its investment in Usk-based Unite Technologies, following its acquisition by US company Panduit. …