13.06.2013
It’s been a busy time for our business-focused CDFIs. They’ve been posting record lending figures, helping more small firms than ever.
The CDFA’s Regional Growth Fund programme brings together £60million of much-needed funding for CDFIs – from the Government, Co-operative Bank and Unity Trust Bank.
This has demonstrated the ability of our members to quickly and efficiently get the funding where it is needed – to the SMEs and micro businesses struggling to get finance elsewhere. Without the pressures of banks to consolidate their balance sheets, CDFIs have been getting the money out of the door. They supported 121 businesses with over £3million in the first few months of the programme. This has created and protected 876 jobs (already exceeding our target for year one), at a cost to Government of £1,748 per job, excellent value for money!
There’s a huge appetite for the funds. CDFIs have applied for over £68million, and £55million has so far been approved for CDFIs to lend over the next three years.
Elsewhere, CDFIs are playing a central role in the delivery of the Start-Up Loans programme – the government’s initiative to support new business amongst young people. CDFIs are using their responsible lending approach and experience of supporting and mentoring entrepreneurs to turn business ideas into reality.
Ten CDFIs are currently delivering Start-Up Loans as part of the CDFA consortium and since January they have lent over £1.1million to 230 young people.
That’s 230 new web developers, caterers, retailers, painters and decorators, couriers, therapists, trainers, electricians, photographers… And with the recent announcement that the scheme is to be opened up to all age groups, it is likely that CDFIs will be helping far more new entrepreneurs – entrepreneurs who will be creating jobs and wealth , providing goods and services, supporting local economies.
While RGF and Start-Up Loans are great for CDFIs and the businesses they’re supporting, it’s a drop in the ocean compared to the demand that’s out there. Our Mind the Finance Gap report identified £1.3billion of potential annual demand for community finance from businesses.
So rather more funding, funding for lending, would help rather more businesses. So how about opening the Funding for Lending scheme to CDFIs?