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Council Launches Recession Busting Business Loans

Council Launches Recession Busting Business Loans

Birmingham businesses can apply for single loans of up to £1 million from the city council after it launched a package of financial support for small and medium-sized enterprises (SMEs) today.

Announcing a groundbreaking £11 million total package of loans at the Conservative Party Conference, Leader Councillor Mike Whitby said this would provide an invaluable opportunity for businesses facing an uncertain future due to changing attitudes to lending on the high street.

Councillor Whitby said: “Already, even before we have officially launched, a number of businesses have already expressed an interest in loans totalling more than £1 million and protecting or creating more than 100 jobs.

“We do not want to compete directly with established lenders but rather fill gaps in the market, which have been brought about as a result of the global economic upheaval of the past twelve months.

“In particular we will focus on small and medium-sized businesses, who despite a proven track record, are unable to gain high street support due to their size, lack of asset base or intended use of the money. The downturn is no time for complacency and this programme shows what good local leadership can do to support struggling, but ultimately viable, businesses in the economy.

“Solutions are always better when they’re taken locally and by taking the initiative in Birmingham and putting our money where our mouth is we believe this service proves that, despite the recession, Birmingham City Council retains the long term vision needed to take decisive action which will support the local economy today, and reap financial benefits for all tomorrow.”

Funded by Birmingham City Council, the loans will be administered by

Birmingham-based investment specialists Investbx, ART (Aston Reinvestment Trust) and Arrow. The focus will be to protect the future of existing businesses, whilst also making capital investments which seek to protect and create jobs.

Terms and conditions for each investment, including repayment periods, will differ from loan to loan, however are expected to be broadly in line with similar products currently available in the wider marketplace.

Working alongside, Investbx, the council has created a £10 million fund to offer investments of up to £1 million for local businesses seeking to expand their operation or secure funds which guarantee their long-term growth and success..

Sue Summers, Chief Executive of Investbx, said: “It is a real honour to have the opportunity to work with Birmingham City Council to deliver loans that will help local SMEs to grow and we feel it sits well alongside our role to raise equity for West Midlands businesses. Investbx has developed a strong reputation amongst the investor and financial communities in the City and we hope to be able to put this to excellent use in working with the council to achieve its goals.”

To help smaller businesses seeking investments of between £1,000 and £50,000 the council has set aside a further £500,000 to be delivered through ART (Aston Reinvestment Trust) and Arrow. This money will attract European match-funding of a further £500,000 through Advantage West Midlands, creating a potential loan fund of up to £1 million.

The smaller scale loans will focus on helping businesses where expansion and investment will create jobs. They will also seek to help unlock cash-flow problems which can typically occur in a recession, where businesses find themselves temporarily without disposable cash, despite a full order book.

Steve Walker, Chief Executive of ART, said: “We are delighted to receive the support of the City Council and look forward to expanding loan finance support for enterprises throughout Birmingham.”

Birmingham City Council’s partnership with Art & Arrow is delivered alongside BeBirmingham.


Notes to editors

  1. Councillor Mike Whitby, Leader of Birmingham City Council, made the announcement at the Urban Hub fringe event, at the Conservative Party Conference on Monday 5 October at Manchester Art Gallery.
  2. Businesses interested in more information on how to apply for a loan should contact:

Investbx - 0121 233 4903 - Sue Summers - www.investbx.com

ART - 0121 359 2444 - Steve Walker (Loan Managers Martin Edmunds, Andy King) www.reinvest.co.uk

ARROW - 0121 607 0129 - Alison Bradley - www.arrowsbf.co.uk

For more information please contact Simon Houltby 0121 303 3503

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  • Reference number: 407-SH
  • Issue date: 13 September 2009