09.01.13
A consortium of community finance providers has received up to £1.3million to give the next generation of entrepreneurs finance and support to start their own business, , through the Start-Up Loans programme. The consortium is led by the Community development Finance Association (CDFA) with a group of its members delivering business support, mentoring and loans to young entrepreneurs across England.
David Cameron last week announced an additional £30million for the Start-Up Loans programme, boosting the total pot for Start-Up loans to over £110 million over the next three years, potentially helping to start tens of thousands of new businesses. The Prime Minister also announced that due to demand from those who had just missed out on the scheme, and the challenges faced to secure loans to start a business, the age limit for application will now be extended from 24 to 30 years old.
With an average loan size of £2,500, it is anticipated that members of the CDFA’s consortium will help over 500 young people set up a business in the schemes’ pilot stage, which ends in March 2013. The community development finance institutions (CDFIs) that will be delivering this latest tranche of funding are:
- In Tees Valley and County Durham: Five Lamps
- In Newcastle, North & South Tyneside and Northumberland: Entrust,
- In Tees Valley and County Durham, Newcastle, North & South Tyneside and Northumberland: Northern Pine Trees
- In the areas of Lancashire County Council and the district councils of Preston, South Ribble, West Lancashire, Lancaster & Chorley, Leyland, Chorley, Skelmersdale, Ormskirk, Wigan, St Helens, Southport Lancaster & Morecambe: Lancashire Community Finance
- In Greater Merseyside and its boundary – Liverpool, Sefton, Knowsley, St Helens, Halton and Wirral: Merseyside Special Investment Fund
- In Hackney, Islington and Tower Hamlets (London): HBV Enterprise
- In Oxfordshire, Buckinghamshire and Berkshire: Fredericks Foundation
- In Calderdale, Kirklees, Harrogate & Ripon, Hambleton, Craven, Leeds, Bradford, York and North Yorkshire: Business Enterprise Fund
The Start-Up Loans initiative was created by Lord Young of Graffham, the Enterprise Advisor to David Cameron. With over a million young people unemployed, Start-Up Loans promotes enterprise as a career option, and provides a boost to economic growth through supporting the development of new businesses.
But the Start-Up Loans programme isn’t just about loans. As well as affordable finance on clear terms, young people receive pre-application support to develop their ideas and business plan, help with developing a loan application, on-going mentoring and support, and access to useful product and service offers that would not normally be available to new businesses.
Sean Dennis, Head of Business Development at the CDFA, commented:
“CDFIs are ideally placed to help young people get into business. They are rooted in their communities and spend time getting to know their clients, providing advice and support to meet their needs. The members of the consortium have vast experience of providing fair and affordable loans to people and businesses that can’t access bank finance. Funding from the Start-Up Loans Company will enable our members to give a boost to the lives of young people in some of England’s most disadvantaged communities.”
Anyone interested in applying for a Start-Up Loan should visit the CDFA website
Notes:
Contact
Sam Collin, Communications Officer, CDFA
[email protected] 020 7430 0222 x207
About the CDFA
The Community Development Finance Association (CDFA) is the membership body for community finance providers. The CDFA exists to create a thriving community finance industry, which brings social and financial benefits to communities across the UK.
Community finance providers, also known as community development finance institutions or CDFIs, lend money to businesses, social enterprises and individuals who struggle to get finance from high street banks. They help deprived communities by offering loans and support at an affordable rate to people who cannot access credit elsewhere.
Read more about the work of the cDFA
The CDFA consortium initially consists of eight CDFA members although the aim is to add more members as the programme moves beyond the pilot phase.
Other CDFA members are also involved in the Start-Up Loans programme. These are: Black Country Reinvestment Society; Business Finance Solutions; Capitalise Business Support; Donbac; East London Small Business Centre; Enterprise Loans East Midlands; Foundation East; GLE One London; Hull Business Development Fund; North London Community Finance; Parity Trust; South West Investment Group.
About the Start-Up Loans programme
Those who apply for a Start-Up Loan will get access to personal support with the most viable progressing on to formal business planning and mentor support. Where the business plan is robust and approved, they will be able to access financial support in the form of a loan. The loan will typically be in the order of £2,500 – directly comparable with existing lenders in this area, and the longest permissible lending period will be 5 years. On average, it is estimated that the loan period will be around 3 years but the decision on duration will be based upon the individual business plan. The interest rate will be fixed at 6 per cent. Delivery partners will repay loans and interest back to a central fund, which can then build a revolving lending model. The Start-Up Loans will be available in England only.
Start-Up Loans are being supported with £10 million for a pilot scheme this financial year, with a further £32.5 million in 2013/14 and £40 million in 2014/15 being made available to grow the scheme. The Prime Minister announced on 3rd January 2013 that there will be an extra £10m in 2013/14, and £20m in 2014/15, details of this will be in the forthcoming Budget.
To administer the Start-Up loans lending pot, the Government created a new body to provide guidance and direction; the Start-Up Loans Company, chaired by James Caan, brings real expertise to the delivery of the scheme.
For more information on the Start-Up Loans Company and how to apply for a loan visit the website