£1.4 million Loan Fund in LeedsJuly 19 2007
Leeds Credit union and Business Enterprise Fund work together to provide a £1.4 million loan fund
£1.4 million loan fund lends Leeds entrepreneurs
a helping hand
A £1.4 million loan fund has been created to help entrepreneurs in some of the most disadvantaged areas of Leeds set up and grow their own businesses. The fund will competitive business loans for individuals and businesses unable to access finance through traditional sources such as banks and building societies.
It has been created by the Leeds LEGI (Local Enterprise Growth Initiative) programme in partnership with the Business Enterprise Fund and Leeds City Credit Union, to encourage enterprise in some of the city’s poorest communities.
Recent research suggests that residents in areas such as Harehills, Beeston, Chapeltown and Gipton face difficulty obtaining loans from the usual high street lenders. As a result many turn to doorstep lenders who charge much higher interest rates, and this could be costing the local economy as much as £9.5 million per year.
Working with Leeds City Credit Union, £1 million of the total loan fund has been allocated to provide help exclusively for start up businesses in disadvantaged areas of the city. The fund will offer loans of up to £5,000 to help entrepreneurs get the first step on the business ladder.
Leeds City Council’s ‘Exclusion to Inclusion’ report interviewed residents from some of the poorest areas in the city and found that 20% of people interviewed would be interested in taking out a business loan but can’t access the high street lenders due to poor credit histories, bankruptcy, or high levels of existing debt.
Over the next three years the credit union is expecting to give over 200 of the new loans to would-be entrepreneurs at a comparatively low interest rate. The loans target people who might normally pay interest rates as high as 300% APR due to poor credit ratings.
Sue Davenport, chief executive of Leeds City Credit Union commented:
“There are many talented people living in these communities who have a real business idea but in the current market have no way of realising their goal. The new loans that we are offering will allow them to break down the first of many barriers to starting their own business.”
The Business Enterprise Fund will also be offering competitive loans in association with the Leeds LEGI programme. The Business Enterprise Fund targets start up and expanding businesses, which are unable to access finance through high street lenders.
With £400,000 dedicated to this project, the Business Enterprise Fund can ensure that all businesses taking out a loan with them will also have access to a business mentor who work with them to develop business management skills. The loans provided by the Business Enterprise Fund start from £5,000.
Stephen Waud, Fund Director at the Business Enterprise Fund commented:
“The scheme is designed to support those businesses who have been unable to secure the funding they need from high street banks. Many businesses fail because they have a fantastic product but poor business management skills and are unable or unaware of how to deal with business issues such as changing markets and increased competition. The mentors help to explain situations and offer practical help in the running of their businesses. This includes book keeping, marketing advice and some legal support”
Both loan schemes are supported financially by the Leeds LEGI programme, but they will be delivered by the Business Enterprise Fund and Leeds City Credit Union.
Leeds has been awarded £15.6 million funding over the next three years to help develop enterprise, create new jobs and boost prosperity in the city’s most disadvantaged communities. By 2010, the programme aims to create over 500 new businesses within areas of greatest disadvantage in Leeds.
Richard Mansell, chair of Leeds LEGI programme board, added:
“The next three years will be an exciting time for Leeds. With the LEGI investment we will be able to make a real and lasting difference to some of the most disadvantaged communities in the city. The projects that we are undertaking are about raising aspirations and providing opportunities that help people to succeed in business through creating a culture of enterprise and entrepreneurship.”
To arrange a consultation with Leeds City Credit Union call 0113 214 5254 and for the Business Enterprise Fund call 01274 207 217.
See the following link http://www.leedsfinancialservices.org.uk/LFSI/news.aspx?NewsID=308&TabID=4&MenuID=1
SoapboxJuly 10 2007
Looking at ways in which the social inclusion agenda can incorporate big business
Soapbox, Yorkshire Business Post 10th July 2007
To read the article http://www.yorkshirepost.co.uk/business-columnists?articleid=3016635
Steve Waud, Director of the £2.5 million Business Enterprise Fund, asks:
Imagine this scenario. The Bank of America, which has a couple of offices around the UK but no High Street presence, decides to invest £200,000 into Chapeltown in Leeds. Now, if you saw a plaque on a wall recording this £200,000 investment, wouldn’t you say ‘That’s odd - what made them do that?’
Well, that’s exactly what I saw in America recently when touring New York State, visiting some of the most disadvantaged communities there. Walking around one of the Puerto Rican sections of the Bronx, I saw a plaque on the wall saying that one of our own UK high street banks (which shall remain nameless), had invested $200,000 locally.
Why? Because in America the banks, along with other corporate organisations, get tax relief if they invest in these communities, under the Community Reinvestment Act (CRA).
Whole areas of the States have been revitalised because of this policy. Credit Unions have been able to get finance to reach out into these communities that the main banks had red lined – or excluded – from getting funding.
The Act has had a tremendous impact since it was introduced in the Seventies. It gives banks and other corporate bodies significant tax breaks when investing in disadvantaged communities – and those communities can use the money as they themselves decide because the funds have to be channelled through accredited CDFIs (Community Development Financial Institutions). It means that large swathes of buildings which were derelict or in the grip of drug barons and gangs have been taken back and restored, people are moving back in, reinvesting in the area, setting up businesses, and generally recreating hope and prosperity.
Here in West and North Yorkshire we have our own very successful CDFI – the Business Enterprise Fund – launched in 2004 by Bradford Chamber, whose Chief Executive, Sandy Needham, joined the study tour in the US with me. Part of the tour took us to Harlem where we saw how the tax boost of the Community Reinvestment Act means that many enterprising new arrivals in the country can access finance to get businesses up and running – and how the rebirth of the area has even persuaded ex-President Bill Clinton to set up office there.
Our visit was inspiring, and I’ve come back with a number of ideas we’re already putting into practice. First and foremost I want to celebrate the entrepreneurs whom we’ve seen struggle against all the odds to make a success of their businesses – we’re planning to throw a big event and have a very special awards ceremony for them. Then I want to set up peer group support for entrepreneurs, and persuade a great many more businesses to give pro bono support to disadvantaged communities. I want to establish a peer mentoring system, and to see a website entrepreneurs can use to get practical advice and showcase their successes.
Perhaps more than all, I want to see our banks and other big institutions having the carrot of tax relief to free up some of their funds for our own most needy communities. In the US, the relief is worth up to 25% of the money invested, spread over five years. For example, an investment of £100,000 would entitle the investor to tax relief worth £5,000 each year for five years.
These tax-led investments are practical, effective, and get results quickly, creating and safeguarding jobs, and helping to reverse downward spirals of under-investment in the communities and areas which need finance most.
Good news for the environmentJuly 06 2007
Innovative recycling company romps home
The Biz awardsJuly 06 2007
Over 300 people shared in my dream to make our inaugral Biz Awards celebration the success they were.
I just wanted to offer a great big thank you to everyone involved; the many businesses that entered the awards, the finalists, those that attended and most of all our partners who funded the evening.
Why not visit our website to see photos and feedback from the evenings awards.
We look forward to seeing you again when we come back at the even bigger and better Biz Awards 2008.
Here is a reminder of who won what on the evening.
Best New Start - SocksOn.co.uk
SocksOn.co.uk were recognised for introducing an innovative and unique service to market with the scope for great development in the future.
In less than seven months they have developed an international customer base and a robust business plan that will take the corporate gift market by storm.
Congratulations to SocksOn.co.uk and the other finalists Gumption Business Centre and Addingham Logistics.
Best Social Enterprise - Dawn Environmental
Dawn Environmental are a shining example of how social issues can be supported by commercial businesses. The judges were particularly impressed by Dawn’s commitment to getting long term unemployed people back into work whilst helping the environment.
Congratulations to Dawn Environmental and the other finalists Urban Biz and Barnsley Community Build.
Fastest Growing Business - Zouk
Zouk have brought a new dimension to Indian Cuisine in Bradford. Their fresh and healthy approach has seen the restaurant smash all predicted sales forecasts and they are now embarking on an extension to double their capacity.
Most Innovative Business - The Cool Drinks Company
The judges were impressed by the Cool Drinks Company approach to an already heavily dominated drinks vending market, being the first company to introduce solely fresh vending.
They have achieved success through the innovation of product they sell, the unique way they engage with their target market and their use of GPS and web technology to stock and replenish their machines.
Congratulations to the Cool Drinks Company and our other finalists Luminary Solutions and SocksOn.co.uk.
Entrepreneur of the Year - The Cool Drinks Company
The Grand Prix of the evening went to The Cool Drinks Company. Recognised not only for delivering totally fresh and healthy drinks to kids through vending but also the way they have taken on well established multi-national vending businesses with the use of GPS and biometeric technology to hone a competitive
I look forward to seeing you all again at the Biz Awards 2008. To pre-register your interest in either attending, entering or sponsoring the event contact our event management team on 01274 777887 or e-mail andy.cullwick@bradfordchamber.co.uk.
For more on the Biz Awards goto http://www.thebizawards.co.uk
Kind regards,
Stephen Waud
Founder
The Biz Awards
Fund nurtures enterprise in deprived city areasJune 28 2007
A £900,000 fund which helps small enterprises that have been turned down by commercial enterprises..
..is creating a new generation of entrepreneurs, according to an independent report.
In the Press
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Free time for City Businesses
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Government further backs BEF
BEF accredited with the status of provider of the Small Firms Loan Guarantee Scheme
Case Studies
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Producer of novelty clocks improves their competitiveness
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Palm Cove Society increases its accomodation capacity
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