Extra financial support is being made available by regional development agency Advantage West Midlands to help small and medium sized businesses in the West Midlands.
£6.5 million – of which £2.25 million comes from the European Regional Development Fund (ERDF) and the rest from Advantage West Midlands – will be available next year for lending to small business via a variety of lenders. These include members of the Fair Finance Consortium – a group of West Midlands-based not-for-profit business lenders, and the Prince’s Trust.
Dr Richard Hutchins, Corporate Director of Economic Development at Advantage West Midlands, said: “The additional financial support being made available for lending to West Midlands businesses is part of a series of measures we are taking with our partners to try to reduce the impact of the global economic downturn in the region.
“This is in addition to funding already provided to Community Development Finance Institutions (CDFIs) through the Advantage Small Loan Programme (ASLP) over the past 3 years, including an extra £1 million made available to a range of lenders in May to address the early impact of the credit crunch”.
“The two decisions taken last week were firstly, that as the ASLP is due to end in December we should add a further £2m to enable the ASLP programme to continue to operate until at least June next year”.
“This will remove the current uncertainty over the availability of ongoing funding for CDFIs and enable them to plan and market their activities with confidence and avoid any moratorium on accepting new enquiries and applications.
”Secondly, we agreed to bring forward the release of £2.25M ERDF funding and £2.25M of our single budget funding to enable these type of lenders to submit applications in December for longer term funding through to 2013.
“In this difficult economic climate this additional funding will help both new entrepreneurs and existing businesses address two of the key challenges facing our region’s economy – underperformance in productivity and business start ups.
“Even before the downturn we were aware of many situations in which viable businesses could not secure the finance they needed from conventional sources. As a result we and the Regional Finance Forum have been working hard, alongside the private sector, to make funding available not only through members of the FFC but also a range of other regional funds that Advantage West Midlands has helped to establish.
“Through the support provided by Advantage West Midlands via the Grants for Research and Development (GRD) and Grants for Business Investment (GBI) schemes, which we administer directly and through a variety of regional venture capital funds, almost 300 businesses secured finance totalling over £27m to the year to 31st March 08, including over 180 businesses across the West Midlands which received loans totalling almost £2.8m from FFC lenders.”