Loan scheme lifeline for area’s businesses (From Worcester News)

Loan scheme lifeline for area’s businesses

4:20pm Tuesday 30th October 2012 in News By Tom Edwards

A MAJOR new £180,000 loans scheme is being launched by Worcester City Council to help businesses in the tough economic climate.

Taxpayers’ cash is being used to help firms that would otherwise struggle to raise funds from mainstream sources like banks.

Business owners are being invited to make bids for a slice of the money, and will be able to apply for a maximum of £40,000.

Since the 2008 near collapse of the banks many small and medium-sized enterprises have complained about problems accessing loans from financial institutions.

Newly set-up traders tend to get the most difficulties, as many banks are reluctant to lend without detailed financial forecasts.

Under the rules, the money will need to be paid back between six months and five years from it being handed out.

The scheme will be managed by a not-for-profit finance body called Impetus, which will vet all the applicants and require some interest to be paid back to cover the costs of awarding it.

Councillor Marc Bayliss, city council cabinet member for economic prosperity, said: “We don’t want the ambition of local businesses to be held back by an inability to secure a loan.

“We hope the announcement will give a muchneeded boost to the local economy and give smaller businesses the confidence to expand and create new jobs.”

The news has been welcomed by Neil Westwood, co-owner of Magic Whiteboard, a web-based company based from his home in Warndon Villages.

He said: “Anything which gets cash into small businesses has to be a good thing.

“In principle, it has to be welcomed – I’m cautiously optimistic about it.

“We’re quite fortunate in not having to get bank loans as we’ve got enough cash in the business, but if I was desperate this would be a good place to go.”

The move is part of major efforts by the city council to help the private sector in recent months.

Bosses have also teamed up with the Herefordshire and Worcestershire Chamber of Commerce to start a new “engagement programme”.

At least 200 businesses in the city will be contacted over the next few months to see if they would benefit from extra support.