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A guide to the Development Bank of Wales

Martin Greenland | 17:59 Wednesday 1st November 2017

The Development Bank of Wales officially opened its doors on 18th October this year to support the Welsh economy by helping local businesses gain access to much-needed funding.

The bank commenced trading with the new £100m Wales Flexible Investment Fund, with more micro finance available and extended lending terms.

In total, the bank currently has £440m available to invest in Welsh businesses.

The Wales Flexible Investment Fund was devised to invest more and over longer periods than existing funds.

The fund will offer up to £5m in a single round, with repayment terms of up to 10 years.

The bank can support Welsh businesses in the following ways:

  • loans from £1,000-5m to start, strengthen or grow a business
  • equity investment from £50,000-5m for established businesses
  • seed finance for pre-revenue tech start-ups
  • equity investment for early stage and mature technology-based businesses
  • finance up to £5m to buy a business (business owners and management teams)
  • property development loans for projects in Wales
  • referrals to Business Wales for business advice and support
  • co-investment alongside banks, crowdfunders, grants, investors and other lenders.

The Development Bank of Wales is a wholly owned subsidiary of the Welsh government and was created to deliver the government's policy objectives across the country.

The bank currently manages a number of public and private funds which total over £1bn:

  • Wales Business Fund: the fund is currently £170.9m and is used to invest in SMEs based in Wales, or willing to relocate to Wales
  • Wales Flexible Investment Fund: £100m for Welsh businesses with a maximum of 1,500 employees
  • Wales Micro-Business Loan Fund: £18m for SMEs and sole traders based in Wales, or willing to relocate
  • Wales Technology Seed Fund: £7.5m for Welsh tech businesses and those willing to relocate to Wales
  • Wales Technology Investment Fund: £9.5m for technology-rich SMEs based in or willing to move to Wales
  • Wales Management Fund: £25m for management teams seeking to own and run their businesses
  • Wales Property Fund: £40m for SME developers based in Wales, who work on residential, mixed-use and commercial development projects in Wales
  • Wales Capital Growth Fund: £25m for Welsh businesses and businesses that plan to move to Wales – of any size – which need short-term finance for stock purchase, project finance and performance bonds
  • Help to Buy Wales: £454m for first-time buyers in Wales or those replacing their main residence in Wales.

Giles Thorley, chief executive of the Development Bank of Wales (pictured above, right), said: “99% of all businesses across Wales are micro to medium size.

“They account for 60% of all private sector employment.

“As businesses face the uncertainty of Brexit, the need to provide stability and stimulate growth is more immediate than ever.

"For Welsh businesses the changes mean that there is more finance available to support them no matter what their stage of business.

“Micro, small and medium businesses are vital to the Welsh economy and we are proud to have worked with so many ambitious and dedicated entrepreneurs.

“The message to Welsh businesses is simple: get in touch.

“We're here to help your business succeed.”

The bank's largest fund – the Help to Buy Wales – is not an investment fund.

The fund exists to help support homebuyers in Wales via a deposit equity scheme.

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