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Loans available for SMEs

17th July 2012

We hear a lot in the news about how difficult it is for businesses to get the finance they need. The Marches Local Enterprise Partnership has been working on this , and here is a round up of financing available.

The Marches Local Enterprise Partnership
Herefordshire | Shropshire | Telford and Wrekin

CHAIRMAN'S BULLETIN No. 4509.07.2012
In this issue: Access to finance

Loans available for SMEs

I'm aware that businesses across the Marches are still facing major issues in relation to access to finance, with the double-dip recession not only affecting cashflow but also stunting investment for growth.

In our region there are a number of business loan schemes and grants available to eligible small businesses for a range of uses, including start-up costs, financing growth and assistance with capital to develop new products and services.

For businesses in the Shropshire and Telford & Wrekin local authority area, the respective councils are now running a fund with Impetus - the region's community development financial institution (CDFI) to provide a certain level of loans to their businesses. CDFIs were developed under the previous Regional Development Agencies to address the issue of access to finance for small and medium sized businesses in the £1,000 to £50,000 loan sizes. Research at the time identified that there was a gap in the market for loans where access had been denied by the High Street banks.

Impetus is now the second largest CDFI in the West Midlands area and is active across the whole LEP area, with funding currently coming from the local authorities and a CDFI Regional Growth Fund bid.

Through Shropshire Council's agreement, the Council's own funding of £1million is being matched by Impetus (with other external funding) to create a total additional pot of £2million available for Shropshire businesses over the next four years.

A separate agreement between Telford and Wrekin Council and Impetus has also been signed and will support fledgling businesses and social enterprises, forming part of the authority's drive to be a Co-operative Council.

Already a number of applications for funding have been received in its first month, with a total commitment from Impetus of providing £400,000 over this financial year from their pot of Regional Growth Fund funding.

For both Shropshire and Telford schemes, businesses wanting to apply must produce a business plan, show evidence that they have been turned down by high street lenders and demonstrate how they intend to protect or create local jobs. Shropshire businesses should contact Impetus directly by phone on 01386556000 or email George@wtof.org.uk. Telford and Wrekin business should could 01952 567589 or email investintelford@telford.gov.uk.

Funding is also available in the Shropshire and Herefordshire area via the Business Enterprise Fund, where the local authorities have secured £500,000 for each county from the European Regional Development Fund. This funding is available for start-ups and businesses to bid into over the next three years. For individuals wanting to start up a business, capital grants are available for up to 50 per cent of the eligible investment or a maximum of £1,500.

For small and medium sized businesses that are currently trading, capital grants are available for up to 50 per cent of the eligible investment or a maximum of £1,500 for those trading under nine months old or a maximum of £5,000 for a business over nine months old.

Due to European regulations, the fund is restricted to certain sectors. Unfortunately, the fund cannot support retail and other businesses that solely sell products or services directly to the general public or land-based industries including farms.

Businesses which would like to discuss eligibility and receive an application form should contact the Shropshire Council business support team on 01743 252596 or email business@shropshire.gov.uk or Herefordshire Council project officer Lyndsay McCron, on 01432 383633 or email lmccron@herefordshire.gov.uk

For further information on the work of the Marches LEP go to our website at www.marcheslep.org.uk, follow us on Twitter @MarchesLEP and we'd be delighted to hear your feedback at enquiries@marcheslep.org.uk

DR GEOFFREY DAVIES OBE DLCHAIRMAN, MARCHES LOCAL ENTERPRISE PARTNERSHIP