The pressure is still on for businesses. All the messages we hear is that small businesses are struggling to get hold of finance. BEF are committed to supporting enterprise in the region and have pledged to Lend a Million this year.
If you support small businesses and want do you bit to support enterprise then we want to encourage as many professionals to join our campaign by signing up and committing to suppot our course.
All you have to do to achieve this is attend our campaign launch on the 26th of May at the Victoria Hotel In Bradford at 5:30 and pledge to support us by referring as many clients as you know who need help.
Lets make the region a propserous one.
Without Kickstart, ATL and the Business Enterprise Fund we would not have made it
Do be alarmed, says fast-growing Salts Security Systems
“I almost called it a day. Had it not been for Kickstart and its partners I would have done,” says security systems expert Paschal Duran.
His growing business, Salts Security Systems, is now so busy that it has already created jobs for three installation engineers and is poised to become a major force in its sector.
A far cry from the situation Paschal, aged 47, of Edward Street, Saltaire, faced just a few months ago.
He recalls: “I left my job with a Bradford security alarm company last February, determined to launch my own business. With many good contacts I soon won numerous orders, which were confirmed in writing.
“But the first three months were really tough. I didn’t have enough cash to pay for all the technical equipment customers wanted installing so I went to several banks looking for a business loan. Every one of them turned me away, saying my proposal was too risky.
“I was on the point of calling it a day when a friend recommended me to contact Kickstart. They put me in touch with George Nash, a business adviser at ATL Enterprise, in Manningham.
“George and Matthew Foote, of the Business Enterprise Fund in Bradford, helped me put together a robust business plan and financial forecast.”
The Business Enterprise Fund provided a substantial loan to Paschal to enable him to pay his staff and buy vital stock for the business. This money came from Bradford Council’s Kickstart programme under the Access2Finance scheme.
Kickstart’s professional services scheme also enabled the business to develop a brand identity, with a brochure and business stationery.
And to top it all the Fund sourced a favourable invoice factoring deal for Salts Security to get the company’s cash flowing again.
Says Paschal: “In one recent bumper month we raised invoices valued at more than £30,000 and we will smash our first year target of £150,000.
“Without Kickstart, ATL and the Business Enterprise Fund we would not have made it.”
One of the company’s latest contracts, won from InCommunities, the leading social housing provider in the District, calls for security alarms to be fitted to around 450 homes in the Bracken Bank estate in Keighley.
Salts Security Systems, a business several banks rejected but Kickstart supported, is now poised to take full advantage of improving economic conditions.
As a bank created for poor women in Bangladesh prepares to open its doors in Britain, Alison Benjamin hears from its Nobel peace prize-winning founder Muhammad Yunus about how the recession can help people out of poverty
There is a banker who is still feted across the world, collecting accolades and honours wherever he goes. The institution he founded more than 20 years ago is unscathed by the current financial crisis, and his opinion is more sought after than ever before as politicians and economists desperately try to fix our bankrupt system.
Muhammad Yunus is to economic development what Nelson Mandela is to world peace - a revered figure whose Grameen Bank has helped millions of Bangladeshis out of rural poverty by lending them small amounts of money, or microfinance, to set up their own businesses. It has 8 million borrowers, 97% of whom are women, and since 1982 has issued more than $6bn (£3.65bn), lending around $100m a month, with the average loan just $220, and repayments of near 100%. Its model has now been rolled out worldwide, from China and Zimbabwe to New York, and plans are underway to open the first British Grameen in Glasgow.
Yunus attributes its success to “trust-based banking”. Money is lent to women - who he identified as using money more effectively than men for the wellbeing of their children - in groups of five. If one defaults, they all suffer, so they support each other to pay it back. And the borrowers own the bank, receiving dividends in lieu of profits.
In 1976, when he approached conventional banks asking them to lend to villagers deep in debt to loan sharks, the young economics student was told it couldn’t be done because the poor are not creditworthy. He has proved them wrong, as has the collapse of the global banking system.
“2009 is a good year to ask again: ‘Who is creditworthy?’ Is it the large banks with large clients? They cannot obtain their money back ... whereas the poor taking tiny loans, without collateral, are paying every penny of it and changing lives,” he told a packed audience last week at a British Council lecture in London. His lecture, entitled A Framework for a Better Future, outlined how the recession provides opportunities not just for banks, but for businesses and governments to create a more equitable world.
“When things work, you do not want to touch it, because it is working. When things do not work, then you think about it. If it still does not work, then you kick it! This is the time to kick,” he argued.
The biggest hurdle to setting up Grameen America last year, he explained, was finding a mainstream bank that would open a savings account for its borrowers. Under Grameen rules, borrowers are required to save a small weekly amount, but in the US, Grameen is a programme, not a bank. Even with Yunus’s clout, it took time to persuade the branches of Citibank to open accounts for customers who wanted to deposit only $2 a week.
“These are the lessons that we need to now bring together to ask ourselves what kind of financial system we should be creating when we move out of this crisis,” Yunus said.
Fast food borrowing
There are now 660 Grameen borrowers in New York City, with an average loan of $2,200. More projects are planned in cities across the US, where, Yunus has said, he wants Grameen to become as “ubiquitous as fast food”.
After the lecture, I ask him how the Grameen model will translate to inner-city Glasgow, where three generations of unemployment is not uncommon in some families. He readily admits it will be difficult to wean people off welfare and make them more self-reliant. “We don’t know what all the problems will be,” he replies.
Despite his calm, thoughtful demeanour, this champion of the poor is openly critical of welfare systems for deterring people from working. “Today, neither the welfare officer nor the welfare recipient has any incentive to move people out of welfare,” he says. “If you earn a dollar it is deducted from your welfare cheque. Wrong things have been built into the system.”
Yunus believes a better system would reward people for finding work by matching every dollar earned, rather then deducting it. In the US, Grameen has negotiated a welfare holiday that allows borrowers to claim welfare for three years while they build up their small business. Similar waivers may have to be looked at for the Scottish model, which is being developed with Glasgow Caledonian University and is in the process of raising £1.5m.
He is currently trialling a series of social businesses, in partnership with multinational companies, that are designed to combine the innovation, technology and risk-taking of business with the social objectives of charity in order to improve the health of poor Bangladeshis. Grameen Danone (featured in Society Guardian, 18 February) provides malnourished children with a cheap, nutritional yoghurt; Grameen Veolia, set up with a French water company, created a small water treatment plant to provide clean drinking water in a country where, Yunus says, “millions of people drink poison every day”; and BASF Grameen will result in the German chemical giant providing treated mosquito nets at little cost to households to protect against malaria.
Yunus is convinced that social business, rather than charity, is the way to tackle social problems. “Your money will be recycled again and again. Much greater impact can be derived from it than from charity. The charity dollar has only one life; you give and it never comes back.”
Nowhere is this more pressing, he believes, than in healthcare. He points to Grameen’s proposed “doctorless healthcare programme” as providing lessons for other countries, including the UK. “Health problems are everywhere, and the costs are jumping as populations age or expand,” he says.
One way to cut costs is to focus on health prevention, early detection, and to cut out the doctor until absolutely necessary.
Health providers
A shortage of doctors at Grameen’s 51 village health clinics has led it to adopt this approach. It is training female graduates, many from the villages, who have put themselves through high school or nursing college with a Grameen scholarship or loan, to run their own health management centres or become self-employed health providers visiting homes with portable diagnostic equipment and mobile phones.
To make it happen, Yunus has managed to persuade some of the world’s most hard-nosed corporations - General Electric, Pfizer and Johnson & Johnson - to agree to create cheaper, handheld versions of hospital kit such as ultrasound machines.
Yunus briefly flirted with politics in 1996 in a caretaker government, but quickly decided that, in Bangladesh, Grameen was the way to change society for the better. There are now some 30 Grameen offshoots covering everything from agriculture, fisheries, and telecommunications.
He clearly relishes the potential there is to channel the knowhow and resources of money-making companies into social businesses . “Once we can do that, we will no longer have any problems,” he says.
No surprise then that, at 68, Yunus has no plans to retire from the world stage. “It’s still real fun,” he says. “Social business, no matter what you say or do, must be a matter of joy. That’s the fantastic thing about it. You can’t beat this, even by making tons of money.”
Curriculum vitae
Age 68.
Family Married, two daughters.
Home Dhaka.
Education Collegiate school, Chittagong; Dhaka University, MA in economics; Vanderbilt University, US, PhD, economics.
Career 1983-present: managing director, Grameen Bank; April 1996-June 1996: adviser in caretaker government of Bangladesh; 1976-83: project director, Grameen Bank Project; 1975-89: professor of economics, Chittagong University, and director, rural economics programme; 1972-75: associate professor of economics and head of economics department, Chittagong University; 1972: deputy chief, general economics division, planning commission, Bangladesh government; 1969-72: assistant economics professor, MTSU Tennessee, US; 1962-65: economics lecturer, Chittagong college.
Awards Close on 100 awards, including the 2006 Nobel peace prize
Sharing the Success helps to put you in the driving seat
TIMES are tough at the moment, and you might feel like your lives are controlled by everyone but you. Maybe now is a good time to consider something a bit different; something where you are in the driving seat? Sharing the Success is helping people like you think about their futures a bit differently;
especially those living in Harehills, Chapeltown, Gipton, Bramley, Armley, Middleton, Belle Isle, Halton Moor, Richmond Hill, Little London, Seacroft and Beeston. It’s a government funded programme, administered by Leeds City Council, which provides help and support for anyone thinking about different ways of earning a living, particularly through self-employment or starting a business. Many people have skills, experience, hobbies or interests that could be turned into money-making enterprises. The problem is where do you start?
Sharing the Success has a host of services including business advice, enterprise loans and seminars all aimed at getting you to where you want to be. There are also a number of enterprise centres where you can get help as well as hire desks if you are just starting out and need a professional base for your business. For example, Shine on Harehills Road, Hillside on Beeston Road, The Biz Centre on Chapeltown Road and the West Leeds Enterprise Centre on Stanningley Road.
Lorna Jasper has recently taken advantage of services offered through Sharing the Success. Lorna, 43, wanted to start her own business but needed help. She had a background in travel and retail and was keen to use her skills in a customer facing role. Her son, Joel, is a dancer and studying musical theatre at Leeds Park Lane College.
When watching him in productions Lorna fell in love with the stunning costumes, which inspired her to open a vintage, fashion shop. However, access to a business loan from high streets proved difficult for Lorna, even with her impeccable credit record.
Coaching
Determined to succeed Lorna went to the Business Enterprise Fund (BEF), part of the Sharing the Success programme. They lent her £5,000 and gave her free advice and coaching to get started.
In November 2008 Lorna opened ‘Upstaged’ selling genuine vintage, retro and theatrical clothing. She said: “BEF gave me the opportunity to be my own boss when other places were unwilling to help. I enjoy the creative freedom and flexibility which comes with running a shop and it gives my son valuable work experience.” ‘Upstaged’ can be found at No.5 Grand Arcade, Leeds, LS1 6PG or via http://www.upstagedleeds.co.uk
Leeds based innergy LPG will accelerate their growth after securing significant funding from government backed Business Enterprise Fund (BEF).
innergy LPG supply industrial and bottled gases to businesses throughout North and West Yorkshire and have seen rapid growth, achieving annual sales of over £1 million in less than three years. innergy LPG supply industrial and bottled gases to over 1200 businesses throughout North and West Yorkshire with customers including British Airways, Arla, Coca Cola, John Smith Brewery, Seabrook Crisps and BritVic. In June 2008 innergys planned expansion in to the supply of Bulk LPG was delayed when a funding package was withdrawn by a high street lender at short notice.
“The Bulk LPG market represents a huge opportunity for us, particularly following the conclusions of a recent investigation by the Competition Commission” explains Gez Walsh, Commercial Director of innergy LPG. “ A number of main stream lenders were very keen to provide the finance to support our growth, until the economic climate changed. Rather than limit or curtail our ambitions we decided to look at alternative sources of funding. Business Enterprise Fund (BEF) not only offered us financial support but we also benefit from their input as experience and accomplished business people”.
As part of their support package, BEF Business Mentor Richard Wharton, joins innergy LPG as a non-executive Director. “ We had been looking for an external advisor so Richards appointment is a valuable additional benefit. He brings vast experience as a Director of a number of varied companies and has worked with other high-growth businesses through Business Link and Leeds Metropolitan University Business Incubator”.
“Our growth potential is limited only by the capital requirement, but this funding package will enable us to achieve our ambitious growth aspirations.”
innergy LPG are finding that the recession does bring opportunities. “We can generally offer business customers’ significant savings on the cost of their bottled gas, Bulk LPG and industrial gases. More and more businesses are now taking our calls, even taking the initiative. With the threat of redundancy now very real, businesses are keen to improve their buying, impress the boss, and reduce the overhead. Suddenly every penny counts.” explains Walsh. He cites a large carpet manufacturer as an example. “They were using cylinders for their fleet of gas-powered forklift trucks. By installing one of our refueling units, pictured below, they estimate savings of in excess of £25,000 per year!”
innergy LPG began trading in March 2006. In September that year they acquired Leeds Calor Gas Centre and in July 2008 made a further acquisition - I C Greens of Knaresborough, one of the UK’s longest established industrial gas agents. Innergy were winners at the NatWest Start-Up Awards in 2007 and are featured in the Start-Ups HOT 100 – the UK’s 100 most exciting start-up businesses. They have been recognised by Rt Hon Stephen Timms MP, Minister for Competitiveness who said of them “I was impressed that they are so confident of the strength of what they offer that they provide on their website links to their competitors, so that customers can make a comparison for themselves. One of my priorities is that in Government we should be doing everything we can to help these businesses succeed and grow – to go on to become large businesses”
“It is easy to become blinkered by the current economic doom and gloom. But we believe A good business will always grow, a strong entrepreneur will always create the opportunity, and an exciting business plan will always attract funding,” says Walsh
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