The East Midlands Development Agency (emda) pledges £3m to help fuel economic growth in the region.
Enterprise Loans East Midlands is a new source of funding for business start-ups and existing companies that have been turned away by conventional high street lenders. As a Community Development Finance Institution Fund, it will be managed by First Enterprise Business Agency (FEBA) to provide loans of between £3,000 and £20,000.
Neville Jackson, emda board member, said: ‘Over the next ten years our aim is to create and safeguard 1,400 jobs and assist 1,000 businesses, half of which will be start up businesses. Enterprise Loans East Midlands will focus on supporting businesses owned and started by young people, women, ethnic minorities and people with disabilities.’
FEBA chief executive Quamar Zaman added: ‘Being unable to access finance is one of the main inhibitors of business start-up and growth, especially for small businesses and deprived communities. Enterprise Loans East Midlands will help us to reach a group that would not otherwise be able to start or develop a business.’
To qualify for funding applicants must have developed a business plan, approached a bank and been declined, and been referred by a business adviser such as Business Link.
Lending decisions will be made on a commercial basis, with loans being repaid over one-to-five years at a fixed rate: 5 per cent above base rate and at a minimum of 10.25 per cent.
In addition to repayments, Enterprise Loans East Midlands will grow through the continued support of emda and FEBA, who intend to add a further £3m to the fund during the next three years.