The British Business Bank is behind the NPIF, with the initiative set to work with ten local enterprise partnerships (LEPs), combined authorities and growth hubs – as well as accountants, fund managers and banks – to provide a mix of debt and equity capital.

The scheme, which will be based in Sheffield, will make cash available to fund managers offering microfinance (£25,000 - £100,000), business loans (£100,000 - £750,000) and equity finance (up to £2m).

Initially announced in November 2015, the launch of the NPIF comes on the back of the British Business Bank's recent Spotlight: The Northern Powerhouse Investment Fund reported which suggested the North contributes £350bn per year in gross domestic product (GDP) – close to one fifth of the UK economy.

It is hoped the fund builds on this foundation by providing smaller businesses with an increased choice of funding and producing greater levels of investment across the Northern Powerhouse.

Keith Morgan, chief executive at the British Business Bank, said: "The region has enormous untapped economic potential that can be realised by improved funding options and opportunities.

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