North East Finance, which manages the £125m Finance for Business North East programme, is in talks with Europe and the Government to allow the scheme to continue until the end of 2015.
If the deal is confirmed, the cash from the European Regional Development Fund (ERDF) is expected to support around 75 businesses and create or safeguard 500 jobs across the North East. A decision is expected later this year.
European cash has helped build some of the North East’s flagship venues, and is now increasingly used to provide firms with growth cash as Brussels looks for job creation efforts.
Andrew Mitchell, chief executive of North East Finance, said: “The additional ERDF money would be a fantastic boost for SMEs and would help stimulate business and employment growth at a time when the region really needs it. It would also leverage in many millions of pounds of private sector investment, creating further wealth and jobs.
“The current Finance for Business North East programme was due to close in December 2014, but this commitment from the Regional Growth Fund and ERDF would allow us to continue investing in businesses for a further 12 months.
“Crucially, any extension of the current programme to the end of 2015 would allow the two LEPs and other partners to put in place long-term investment programmes to follow the FFNBE programme and ensure continued availability of investment capital through to the end of the decade and beyond.”
Jeremy Middleton, from the North East LEP, said: “Coming on the back of the ï¿½7.5m Regional Growth Fund money won by the North East LEP to extend the Finance for Business programme, this additional match funding would be a huge boost to businesses that are seeking equity finance or are struggling to secure loan investment from traditional sources. Talks to secure the funds have been very positive and I’m confident of a successful outcome.”
The Finance for Business North East fund is the most successful of its type in the UK. Since its launch in 2010, it has helped 500 small and medium sized firms, creating or safeguarding around 2,500 jobs in the region. It is on track to create more than 5,000 jobs and safeguard a further 2,800 by the end of next year.