About this programme
Midlands Engine Investment Fund II (MEIF II) is a £400 million fund run by the British Business Bank to back small and medium-sized businesses across the Midlands. It is one of the Bank's Nations and Regions Investment Funds, set up to increase the supply and diversity of early-stage debt and equity finance for smaller businesses that might otherwise struggle to raise it from mainstream lenders.
MEIF II does not invest directly in businesses. It invests through funds run by MEIF II's appointed fund managers, and offers three separate commercial finance products rather than a single instrument: Smaller Loans from £25,000 to £100,000, Debt Finance from £100,000 to £2 million, and Equity Finance up to £5 million. This record covers the equity finance route.
Equity finance under MEIF II is delivered by Mercia Ventures, covering both the West Midlands and East/South East Midlands divisions of the fund. It is aimed at established businesses with ambitious growth plans, or large start-ups with high growth potential, seeking long-term capital through to revenue and profit rather than a quick pre-seed cheque.
The fund covers the whole of the Midlands — West Midlands, East Midlands and South East Midlands — and can invest alone or alongside other sources of debt or equity capital already involved in a deal.
How it works
MEIF II is structured as three separate finance products — Smaller Loans (£25k–£100k), Debt Finance (£100k–£2m) and Equity Finance (up to £5m) — deployed through appointed fund managers rather than a single central desk at the British Business Bank.
For equity, a business deals directly with Mercia Ventures, which manages the equity finance product across both the West Midlands and East/South East Midlands.
The fund can invest alone or co-invest alongside other private-sector debt or equity providers already backing the deal.
Since launch, MEIF II has invested more than £100m into 225 businesses across the Midlands, made up of over £65m invested directly by the fund alongside an additional £38.6m mobilised from the private sector.
Who can apply
MEIF II uses an inclusive approach but applies eligibility criteria, and fund managers advise on suitability case by case.
A business must be headquartered in the Midlands, or have a significant operating presence there, to qualify — the fund covers the West Midlands, East Midlands and South East Midlands.
For equity specifically, the fund targets established businesses with ambitious plans, or large start-ups with high growth potential, rather than early pre-revenue concepts with no trading history.
How to apply
- Enquiries and applications for MEIF II equity finance go direct to Mercia Ventures, the appointed fund manager, rather than to the British Business Bank centrally.
- Make a direct enquiry to Mercia Ventures to discuss your business and funding need.
- The fund manager assesses the business against MEIF II's eligibility and investment criteria and advises on fit.
- Formal application, due diligence and investment terms are negotiated directly with Mercia Ventures.
Frequently asked
Who runs the Midlands Engine Investment Fund II?
The British Business Bank set up and funds MEIF II, but it doesn't invest directly — the money is deployed through appointed fund managers. For equity finance, that manager is Mercia Ventures, covering both the West Midlands and East/South East Midlands.
How much equity can a business raise through MEIF II?
MEIF II's equity finance product goes up to £5 million per investment. The fund also offers two debt products for businesses that want debt rather than equity: Smaller Loans of £25,000 to £100,000, and Debt Finance of £100,000 to £2 million.
Where does a business need to be based to apply?
The business must be headquartered in the Midlands, or have a significant operating presence there, covering the West Midlands, East Midlands and South East Midlands.
Do you apply to the British Business Bank directly?
No. MEIF II doesn't invest in businesses directly — enquiries and applications go straight to the appointed fund manager (Mercia Ventures for equity), not to the British Business Bank centrally.
Can MEIF II equity be combined with other investors in the same round?
Yes. MEIF II's product funds can invest alone or alongside other sources of debt or equity capital where appropriate, so it can sit within a larger round with private co-investors.
My bank can't fund the full amount I need — can MEIF II help?
Yes. MEIF II's product funds are designed to invest alone or alongside other sources of debt or equity capital, so it can supplement finance a bank or other lender can only partly provide.
Reviewed 2026-08-16. Programmes change — confirm current eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private consultancy and is not affiliated with any government authority.