Building the Business Bank: Investment Programme for Proposals for Managed Investments

BUILDING THE BUSINESS BANK: INVESTMENT PROGRAMME Request for Proposals for Managed Investments APRIL 2013 This Request For Proposals has been prepared by the Department for Business Innovation and Skills for the purpose of inviting Proposals from prospective Applicants to receive funding for Managed Investments under the Investment Programme. Request for Proposals for Managed Investments Contents 1. Introduction ................................................................................................................................. 3 2. Process for Managed Investments............................................................................................ 6 3. Investment Criteria ................................................................................................................... 10 4. Terms and Conditions .............................................................................................................. 15 Annex I: Information Requirement Checklist ............................................................................. 16 Annex II: SME Loan Book ............................................................................................................ 22 Annex III: Investor Returns .......................................................................................................... 23 Annex IV: Basic Information ........................................................................................................ 24 2 Request for Proposals for Managed Investments 1. Introduction 1.1 Building the Business Bank In March 2013 the

Secretary of State for Business Innovation and Skills published (1) “Building the business bank” . This publication provided an update on developments made since the business bank programme was announced at Autumn Statement 2012, and set out a timetable for implementation of the new institution. It was announced that the business bank would be set up in stages so that support was made available to businesses quickly. Immediate enhancements, to be launched prior to the incorporation of the business bank, announced in “Building the business bank” included a range of Equity Solutions and Debt Solutions: Equity Solutions £50m to expand the Business Angel Co-Investment Fund to a £100m fund; and £25m to extend the Enterprise Capital Fund programme to include a VC Catalyst Fund, which will invest in venture capital funds that specialise in early stage venture capital and are near to close, enabling them to commence investment in small and medium sized enterprises. Debt Solutions Plans to expand the Enterprise Finance Guarantee (“EFG”), aimed at using guarantees to help bridge the “affordability gap” by providing a guarantee to lenders of up to 25% of the overall cost of repaying a loan; and separately, extending EFG to support businesses lacking track record, who are seeking loans of under £25k; and A £300m investment programme, to build on the recent investments made by the Business Finance Partnership to focus on promoting diversity of supply of lending by encouraging new entrants and the growth of smaller lenders in the market. It was announced that this latter £300m investment programme (the “Investment Programme” or the “Programme”) would be launched by the Department for Business Innovation and Skills (“BIS”) in spring 2013. Through the Programme BIS wishes to make commercial investments, in a variety of (2) forms, on terms and conditions that would be acceptable to a Private Sector Investor . BIS may invest, alongside Private Sector Investors, in areas that include: Equity, equity-like and debt instruments in financial institutions; Debt funds or asset backed lenders that lend directly to businesses; or Non-bank channels, such as supply chain finance, peer-to-peer lending and other lending platforms. 1 https://www.gov.uk/government/publications/building-the-business-bank-strategy-update. 2 Third party investor, including the Applicant if relevant, but excluding other public sector bodies. 3 Request for Proposals for Managed Investments ( 3) From today, BIS intends to consider Proposals on a first come, first served basis with a...

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