The FSE Group has launched the Future London Growth Fund, a debt vehicle targeting over £70 million in lending to London-based scale-up businesses that struggle to access growth capital from mainstream lenders. Cornerstone commitments have been provided by the British Business Bank, which committed £20 million, and Funding London, the Mayor of London’s investment arm, which invested through its GLIF Limited entity.
The fund offers individual loans of between £1 million and £3 million, a ticket size positioned in the gap between standard bank finance and larger venture debt facilities. It is open to companies with strong commercial traction and credible growth plans but which may not yet be profitable. Applications are now open across all 32 London boroughs and the City of London.
The lending gap it targets
The structural problem the fund is designed to address is well documented. Research from the British Business Bank’s “Alone Together” report found that London is the toughest place in the UK to be an entrepreneur: only 71% of London-based business owners reported a profit compared with a UK average of 84%. Entrepreneurs in economically deprived urban areas face compounding barriers to finance even when they are physically proximate to one of the world’s most developed investment ecosystems.
Puneet Raj Bhatia, managing director at Funding London, described the target cohort as businesses seeking deals too large for early-stage finance but routinely overlooked by mainstream lenders. That is a segment the British Business Bank has been trying to address through its regional investment funds for several years, with FSE already managing the £66 million debt portion of Funding London’s Greater London Investment Fund since 2019. The new fund is a direct continuation of that regional strategy.
Kala Desai, head of the Future London Growth Fund at FSE, said: “London is home to an exceptional community of high-growth, innovative businesses, yet many still hit a barrier when accessing scale-up capital.”
FSE’s track record and market context
FSE brings a substantial operational base to the fund. The firm manages approaching £460 million across its fund portfolio, has backed over 1,000 scaling businesses and reports that £300 million of its invested capital has helped portfolio companies leverage an additional £780 million in private funding. It also manages debt tranches within the British Business Bank’s South West Investment Fund, Investment Fund for Scotland, Midlands Engine Investment Fund and the newly awarded South East Investment Fund.
The broader market for public-private SME debt in the UK has expanded steadily since the British Business Bank’s inception in 2014. In its 2025-26 financial year the Bank supported £9.4 billion in finance to smaller businesses, crowding in £4.3 billion of private capital alongside £1.3 billion of public funding. The Future London Growth Fund sits within that architecture, applying a regionally focused, relationship-led model that has become increasingly common as public development banks seek to direct capital into underserved geographies rather than relying on commercial lenders to self-allocate.
The competitive context is relevant for advisers directing borrowers toward this type of facility. Growth lending in the £1 million to £3 million range is also covered by a range of challenger banks and specialist lenders, several of which have increased their UK regional presence in recent years. What the FSE model emphasises is the relationship and network element, rather than a purely automated credit decisioning approach, which may be an advantage for businesses that have non-standard financial profiles.
The next markers to watch are deployment pace, the sector mix of the initial cohort of borrowers, and whether the fund attracts further private capital commitments beyond its public cornerstone investors.
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