Big impact, Smaller Loans - how NPIF II is driving forward Northern growth through smaller loans

As headlines continue to spotlight global stock exchanges, high-profile IPOs, and the rivalry between global financial hubs, there’s a quieter but just as important conversation being missed – the needs of businesses at the very beginning of their journey. These businesses, which are often seeking smaller but meaningful funding, are the backbone of local economies and innovation, yet they frequently struggle to access the support that fuels large-scale financial narratives.

That’s why the Northern Powerhouse Investment Fund II (NPIF II) provides a range of funding options for businesses across the North. Among these, is its smaller loans option, which is designed to offer flexible support for businesses seeking finance between £25k and £100k. 

Smaller loans can offer companies several advantages over larger debt deals or equity financing. In some cases, they can offer more manageable repayment terms that ease the burden on cash flow. Unlike equity deals, they allow businesses to preserve full ownership and control, avoiding dilution of shares or external influence on decision-making. Additionally, smaller loans are often quicker to secure, making them ideal for addressing short-term needs or seizing opportunities without long-term financial commitments.

Through targeted and accessible access to finance, NPIF II is giving ambitious businesses across the North of England access to the benefits of smaller loans, helping them move swiftly and quickly throughout their growth journey. For many entrepreneurs, a smaller loan can be the first crucial step giving them necessary breathing space to invest in equipment, take on new staff, improve operations or launch a new product. These are often fast-growing, early-stage, or family-run businesses that need just a small amount of capital to kickstart their ambitions.

Backing the backbone of the economy

In 2024, smaller businesses accounted for 99% of the business population in the UK, and around 60% of employment ^{Read footnote text 1} . Across the North, they are the backbone of our high streets, digital sectors and innovation clusters. They may not always make national headlines, but their impact is felt in every community.

Importantly, they are not short on ambition. Whether it’s a local engineering firm investing in low-carbon solutions or a marketing business transforming its tech use, it is often smaller loans which act as that first catalyst in driving their growth.

Northern businesses backed by smaller loans

Over the past few months, NPIF II has supported a number of ambitious Northern businesses by providing them with smaller loans, helping them drive their growth forward. 

One business that is making the most of its smaller loan is Cheshire-based designer and manufacturer of smart technology-integrated furniture, Frank Olsen Furniture. The team is using its funding to invest in product development and focus on new markets, including Canada and Australia, showcasing how a smaller loan can even support with larger ambitions like international expansion.

A Middlesborough workplace wellbeing platform, OptiMe, also secured a smaller loan as it wanted to drive forward innovation. The funding is helping OptiMe to personalise its in-app wellbeing content and introduce AI-driven coaching features to ensure its users get the most out the platform. The smaller loan has also supported OptiMe to create 10 new jobs.

While a small loan may be perceived as having a small impact, this isn’t the case for Leeds-based The Marshmallowist. Through the loan, the creator of luxury gourmet marshmallows is now looking to open a new bakery to help increase its production capacity. It is also planning to create five new jobs, providing opportunities for local people while contributing to the regional economy.

From Teesside to Yorkshire to Cheshire, these stories showcase the power and impact of smaller loans. Each of these businesses had the vision and capability to grow, they just needed support to get them there.

A smarter approach to finance

It’s important recognising that the type of finance businesses receive can be just as important as the amount. NPIF II - Smaller Loans offer a flexible route to growth, allowing businesses to maintain control, build momentum and move at their own pace. 

Through smaller loans, NPIF II will continue to back the bold, the determined and the locally rooted businesses that are quietly shaping the future of the North.

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