A new fund promising more than £70 million in loans for London’s ambitious scale-up businesses has launched, with backing from the British Business Bank and the Mayor of London.
The Future London Growth Fund, managed by The FSE Group, will offer debt finance to companies across the capital’s 32 boroughs and the City of London that have strong commercial traction and credible plans to grow but struggle to attract traditional investment.
Cornerstone commitments have come from the British Business Bank and from Funding London, the Mayor of London’s investment arm, which has invested through its investment entity GLIF Limited. The support forms part of the Mayor’s ambition to drive economic growth through the London Growth Plan.
Loans will range from £1 million to £3 million and are aimed at filling the gap between conventional bank lending and larger-scale venture debt — a stretch of the market where growing firms often find themselves stranded.
What this means for London businesses
For the firms it targets, the Future London Growth Fund is neither a grant nor a conventional loan. It is debt finance designed for businesses that are not yet profitable but can show they are heading that way — companies with customers, revenue momentum and a believable plan, but without the track record or collateral that makes bank managers comfortable.
That distinction matters. A bank loan typically demands security and a steady trading history. A grant gives money away but comes with narrow eligibility and fierce competition. Venture capital, meanwhile, takes equity and expects explosive returns. The new fund sits in the middle: lending to firms too big for the first, unsuited to the second, and not yet in the sights of the third.
If your business is turning over well, adding staff and winning contracts but still spending ahead of profit, this is the kind of vehicle built for that moment — with the obvious caveat that it is still debt, and has to be paid back.
Why London’s founders need it
The announcement leans on research from the British Business Bank’s Alone Together report, which paints a sobering picture of life for entrepreneurs in the capital’s poorer neighbourhoods. Only a small share of the city’s businesses can benefit from the investment ecosystem London is famous for globally, the report found — and London was rated the toughest place in the United Kingdom to be an entrepreneur.
The paradox is familiar: the Square Mile sits at the centre of one of the world’s great financial centres, yet businesses a few miles away in Barking or Tottenham can find growth finance out of reach. Proximity to capital, it turns out, is not the same as access to it.
The fund is explicitly pitched at founders who may be overlooked or underserved by traditional finance providers — the sort of businesses whose postcode, sector or ownership profile means they never quite make it past the first meeting.
The London Growth Plan connection
City Hall’s involvement puts the fund squarely inside the Mayor of London’s London Growth Plan, the administration’s blueprint for keeping the capital competitive. The pitch is that growth should not be the preserve of a handful of postcodes — and that public money, levered through experienced fund managers, can unlock private capital alongside it.
Whether £70 million proves enough to move the dial in a city this size remains to be seen. But for the founders it is aimed at, the message from the launch is a simple one: the money is real, the doors are open, and London’s growth story is supposed to include them too.
The fund is run by The FSE Group, which already manages regional investment funds elsewhere in the country.
It arrives as councils across the capital press for fairer funding settlements, and as City Hall continues to tie major investment to job creation across London.
