FSE launches £70m London fund to unlock £1m–£3m loans for founders
This article covers The FSE Group, a fund manager, launching the Future London Growth Fund, a debt vehicle expected to provide more than £70m of lending to scale-up companies across all 32 London boroughs and the City of London, backed by a £20m cornerstone commitment from the British Business Bank and capital from the Mayor of London’s investment arm via GLIF Limited. The fund aims to fill a gap between traditional bank loans and larger venture debt by offering loans of £1m to £3m to London scale-ups, including firms that may be outside standard bank criteria.
The FSE Group has launched the Future London Growth Fund, a debt vehicle expected to provide more than £70m of lending to scale-up companies across all 32 London boroughs and the City of London. Backed by a £20m cornerstone commitment from the British Business Bank and capital from the Mayor of London’s investment arm via GLIF Limited, the fund aims to fill a gap between traditional bank loans and larger venture debt lines for companies seeking £1m to £3m.
Why it matters
London remains a global hub for startups and scale-ups, but access to mid-sized growth finance is uneven. The Future London Growth Fund targets that middle band of lending, where firms often need £1m to £3m to execute expansion plans but can fall outside both bank lending criteria and the remit of larger venture debt providers.
That matters because, according to the British Business Bank’s Alone Together report, London is comparatively tough for entrepreneurs: 71% of business owners in the capital report a profit versus the UK average of 84%. The fund is explicitly aimed at businesses with credible scaling plans that may not yet be profitable but are expected to reach profitability as they grow.
How the fund will work
The fund intends to deploy more than £70m across the capital, offering loans in the £1m to £3m range. Its stated focus is on founders and management teams who are often overlooked by traditional finance — for example, firms in underserved communities or those without established investor networks. The mentoring and relationship-led approach promised by the manager aims to pair capital with practical support.
Julie Silvester, CEO at The FSE Group, said:
We are delighted to be launching the Future London Growth Fund to aid businesses with high growth potential across the capital. At The FSE Group, our core mission is to unlock potential in scaling businesses that traditional finance often overlooks. Providing flexible, relationship-led capital gives ambitious management teams the freedom to innovate and create high-quality jobs. The Future London Growth Fund is a direct continuation of that ethos, providing the tailored support scaleups need to execute their next phase of expansion.
Kala Desai, Head of the Future London Growth Fund at The FSE Group, said:
London is home to an exceptional community of high-growth, innovative businesses, yet many still hit a barrier when accessing scale-up capital. Building on our proven track record, this new fund addresses that gap, providing debt finance to exciting and growing businesses across the capital. We are thrilled to bring dedicated finance to London’s founders to facilitate their growth and deliver long-term economic impact.
Who’s behind the fund
The FSE Group will manage the vehicle. The firm already manages the £66m debt portion of Funding London’s Greater London Investment Fund and runs parts of several regional public-backed funds, including allocations from the British Business Bank’s South West Investment Fund, the Investment Fund for Scotland, and the Midlands Engine Investment Fund. It was also recently appointed manager of the South East Investment Fund (Debt).
Led by CEO Julie Silvester, FSE manages approaching £460m of funds and says it has supported more than 1,000 scaling businesses in sectors such as tech and digital, clean energy and advanced manufacturing.
Adam Kelly, Managing Director, Debt and Regional Funds at British Business Bank, said:
It can be easy to assume that businesses in London have access to all the finance they need, but that isn’t the reality for many ambitious founders across the capital. Smaller businesses operating in underserved communities, or those without established investor networks, can still struggle to secure the growth capital they need to scale. Our £20 million cornerstone commitment to the Future London Growth Fund will help address that gap, increasing the availability of finance for businesses with strong growth potential and supporting economic opportunity across London’s diverse communities.
Inside the portfolio opportunity
The fund is pitched at scale-ups with demonstrable commercial traction rather than early-stage startups. Lending of £1m to £3m is sized to support product expansion, market entry and hiring plans — activities that often precede profitability. For London firms in sectors including digital, cleantech and advanced manufacturing, that kind of ticket can be the difference between stalling and scaling.
Political and policy context
The Mayor of London has framed the fund as part of the London Growth Plan. Sadiq Khan, Mayor of London, said:
London is the best city in the world to start and grow a business, but too often many are overlooked by traditional finance providers. As a key commitment of my London Growth Plan, the Future London Growth Fund directly targets that funding gap and will provide a huge boost to businesses looking to scale up, helping them accelerate development and create new jobs. Delivering millions of pounds of support, the Fund will enable businesses to innovate and expand, bringing lasting economic impact as we continue to build a better, more prosperous London for everyone.
Publicly backed funds and regional investment vehicles have become a common policy tool to address financing gaps that private markets underserve. This fund joins a patchwork of British Business Bank-backed and local public investment programmes aimed at keeping high-growth firms on the capital’s books.
The bigger picture
The Future London Growth Fund responds to a persistent mismatch in the London market: an abundance of early-stage capital and late-stage cheques, but fewer options for the crucial scaling phase. By providing mid-sized debt lines and leaning on FSE’s existing regional fund experience, the initiative could help more London firms bridge to profitability and expand hiring.
For founders, the fund offers another route to growth capital that does not dilute equity while pairing finance with a manager experienced in public-backed deployment. For the wider ecosystem, it is another example of public-private collaboration to close financing gaps that, if it performs, could be a model for other UK regions.
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