20/07/2011
The second round of the Government's Regional Growth Fund has been more than three times oversubscribed.
Although many local businesses are set to benefit from funding from the £950 million pot, The Financial Times report that over two thirds of businesses are set to be disappointed following the tremendous interest in the project.
The Government will now be faced with the task of choosing which of the 500 or so bids is most worthy of a grant to assist long-term business growth. The total sum of bids for Government funding equates to around £3 billion.
Those who miss out on Government funding may want to consider other options for raising cash such as invoice finance.
The process, which involves issuing advance payments on any invoices held, has been used by many SMEs to help fund investment and employment opportunities.
Lord Heseltine, the peer running the process, had praised the first round of grants as a success despite after an extra £200m to the original pot.
This allowed 50 projects to benefit from the first round of funding but unfortunately there is no additional cash available to add to the fund this time around.
Shadow business minister Gordon Marsden hit out at the fund via labour.org.uk by claiming that the project had proved "inadequate" in satisfying business-owners desires.
Joe Elvin