Enterprise Capital Funds

Enterprise Capital Funds have been established to address a market weakness in the provision of equity finance to SMEs. Government funding is used alongside private sector funds to establish funds that operate within the ‘equity gap’; targeting investments of up to £2m that have the potential to provide a good commercial return. The first five funds supported under the scheme were launched in 2006-7 following a pathfinder competition. A further three funds were awarded ECF status in 2007 and have now been launched. A further fund was awarded ECF status in December and will be available later in the year.

Enterprise Capital Funds

As of 1 April 2008 responsibility for the management of ECFs along with BERR’s other equity funds and the Small Firms Loan Guarantee (SFLG) was transferred to a new body, Capital for Enterprise Limited (CfEL). This change will bring about improvements in the way the funds are managed and selected but does not change the nature of the funds or their policy objectives.

Current Status

The third round competition for ECFs was announced alongside Budget 2008 and publication of Enterprise: Unlocking the UK’s talent (HMT, BERR March 2008) along with confirmation that further rounds would be launched in April 2009 and 2010. 8 funds have been launched since 2006 and a further fund was awarded ECF status in December and will be available later in the year.

The Selection Process

The detailed selection criteria are set out in the Bidding Guidance below. This guidance is updated from that of the second round and bidders are advised to use this version when preparing bids.
It is recommended that potential bidders make contact with the selection team in CfEL prior to submitting a bid, particularly if there are aspects of the bid that are novel or if there are any questions over how the bid meets the ECF criteria.

A shortlist of bidders will be invited to provide the further documentary evidence and any other information set out in section 5 of the Bidding Guidance.

Prospective bidders should contact the ECF team.

Please note that requests for business advice, investment or other support cannot be answered. Businesses looking for such advice should contact their local Business Link.

Enterprise Capital Fund Seminar

On 6th February 2008 the ECF team held a seminar for potential ECF managers. The seminar was very well attended and included a presentation focusing on the bidding process for the third round.