The finance, which comes from the Small Business Service's (SBS)
'Phoenix Fund', will boost entrepreneurship amongst deprived areas by
Development Finance Institutions (CDFIs). CDFIs provide finance and
business assistance to potential entrepreneurs and small firms who
are often unable to access the finance they require from banks and
other conventional sources. Given the right backing, these
enterprises can have a positive impact on the communities in which
Speaking at the launch of CDFI funding for Hastings-based, 1066
Enterprise Ltd, Mr Griffiths said:
'Entrepreneurs play a crucial role in rebuilding Britain's
disadvantaged communities, but in some parts of the country they're
unable to get the finance they need from conventional sources. Yet
businesses operating in these areas need investment like all other
'Today's funding is another step on the road to creating jobs and
prosperity across all areas of the country.'
Today's announcement is for the third tranche of funding from the
Phoenix Fund for CDFIs and takes the total support to £31m over
the last eighteen months. The latest cash boost will help fill the
gaps that exist in SME funding across certain parts of the country
and will broaden the funding opportunities for underrepresented
groups, such as women entrepreneurs and the socially excluded.
Examples of the CDFIs benefiting from today's announcement include,
The Fredericks Foundation based in SE England, who provide finance to
lone parents, ex-offenders and the disabled to set up in business and
First Enterprise Business Agency who operate a loan fund targeting
ethnic minority businesses in greater N ottingham, an area whose SMEs
have greater difficulty accessing finance than in other parts of the
Support from the Phoenix Fund is allocated to CDFIs on a competitive
challenge basis. The assessment process consists of a review against
published criteria by SBS Investment & SME Finance Directorate
officials followed by focused region- specific discussions between
officials and their counterparts in each of the RDAs. SBS regional
teams and government offices also have the opportunity to make
contributions to the process. A series of regional papers, informed
by individual papers on each application, are then presented to and
rigorously considered by Small Business Investment Taskforce.
DESCRIPTIONS OF PHOENIX FUND ROUND 3 CDFI PROJECTS
RECOMMENDED FOR SUPPORT BY SMALL BUSINESS INVESTMENT TASKFORCE
Local Investment Fund (LIF) (£500,000 for Capital purposes) LIF wish
to enhance the Adventure Capital Fund (ACF), a Home Office initiative
intended to help capitalise social enterprises to effectively deliver
public services, by offering smaller scale 'patient capital' in the
form of innovatively structured loans and investments of up to
£50,000. This proposal offers the opportunity to evaluate co-lending
with local CDFIs, profit-sharing mechanisms and royalty-based
repayments and thus the overall viability of achieving the 'double
bottom line' of both financial and social return.
Street UK £630,000 (for Revenue purposes)
Street UK is a specialist micro-finance organisation supporting
micro- enterprises, including many emerging from the informal
economy, with a thorough package of networking, business advice and
access to finance. It plans to widen the geographic coverage and thus
number of enterprises supported in the North East, West Midlands and
London. There is clear evidence of further demand for Street UK's
services and the application for reven ue support will ensure that
external capital already raised is used to best effect.
Cashpoint for Social Enterprise (NESEP) £297,500 Revenue, £500,000
Capital CashPoint will serve social enterprises across the North East
and through them will respond to the needs of the diverse range of
disadvantaged communities that exist in the region. One North East is
very supportive of the application, regarding it as an integral
element of the brokerage model that they are developing for business
support throughout the region.
Project North East (PNE) £140,000 Revenue, £300,000 Capital
PNE is a well-established organisation that has been delivering
business support in the North East for 20 years. The proposed new
fund will focus on assisting SMEs in wards in the North East region
falling within the 25% most deprived wards in England as measured by
the IMD, with particular emphasis on businesses within identifiable
clusters and those developing in incubators within these areas. The
bid has the support of One North East.
South East Northumberland Enterprise Trust (SENET) £90,000 Revenue,
SENET are targeting an area of high deprivation where no CDFI is
currently operating. Support will be concentrated on the long-term
unemployed and other socially disadvantaged groups in the former
coalfield and rural areas of Northumberland. SENET are an established
organisation with good links to other business support providers and
their plans have the support of One North East.
Several proposals are currently under review for possible support in
the next tranche of projects.
Yorkshire & Humber
Partnership Investment Fund (PIF) Micro Loan Fund £616,000 Revenue
The PIF Micro Loan Fund is a region-wide fund targeted at individuals
and SMEs located in the Yorkshire Objective 2 areas and which are
unable to access mainstream finance . Loans of between £3,000 and
£15,000 will be offered. Yorkshire Forward is highly supportive of
the proposal, which they regard as based on a strong partnership
between the public and private sectors. Phoenix Fund revenue support
will enable the effective deployment of £5m of public (45%) and
private capital (55%) that has already been committed to the Fund.
Partnership Investment Fund (PIF) Small Loan Fund £858,000 Revenue
PIF Small Loan Fund is a region-wide fund targeted at SMEs located in
the Yorkshire Objective 2 areas, unable to access mainstream finance.
Loans of between £15,000 and £100,000 will be offered. Yorkshire
Forward is highly supportive of the proposal, which they regard as
based on a strong partnership between the public and private sectors.
Phoenix Fund revenue support will enable the effective deployment of
£10m of public (45%) and private (55%) capital that has already been
committed to the Fund.
Key Fund South Yorkshire (KFSY) £128,000 Revenue, £1,000,000 Capital
KFSY provides a range of grant and loan products to social
enterprises and other businesses that can demonstrate positive social
outcomes across the whole of South Yorkshire. The current project
will enable KFSY to expand their lending operations. Yorkshire
Forward are fully supportive of KFSY's bid and have noted that it is
consistent with the Regional Economic Strategy and complements the
work of the PIF Funds and South Yorkshire Investment Fund.
Bradford Chamber of Commerce & Industry (BCCI) £90,000 Revenue,
BCCI intend to establish a CDFI targeted towards individuals and
small businesses operating in Bradford. Loans of between £1,000 and
£15,000 will be offered, with a range of linked business support
services including advice, training and mentoring.
First Enterprise Business Agency (FEBA) £185,000 Revenue, £ 1,000,000
Capital FEBA currently operate a loan fund targeting ethnic minority
businesses in Greater Nottingham. With this further support FEBA will
expand their operations across the Region. EMDA are fully supportive
of FEBA's plans, commenting that it fits with Regional Strategies,
builds well on other initiatives and is addressing a market failure.
Derby Loans £75,000 Revenue
Derby Loans is a new CDFI following the 'Money Line' model offering
personal and business lending to financially excluded individuals and
businesses in the City of Derby. Derby Loans achieved CITR
accreditation in March 2003. An offer of revenue support is proposed,
linked to Derby Loans successfully raising capital in accordance with
their CITR accreditation.
North Staffordshire Risk Capital Fund Plc (NSRCF) £90,000 Revenue,
The NSRCF aims to support the development of local businesses in a
disadvantaged area that does not currently have access to a CDFI.
NSRCF are an innovative private sector led organisation that has
achieved CITR accreditation and is currently raising capital from
investors. NSRCF have developed effective partnerships within the
sub-region and Advantage West Midlands are supportive.
South West Investment Group (SWIG) £200,000 Capital
SWIG intends to work in partnership with the Women's Business
Development Agency (WBDA), in order to make loans of between £500 and
£5,000 to women entrepreneurs located in Cornwall. SWIG and SWERDA
regard the proposed fund as a pilot that, if successful, will be
rolled out across the region.
Wessex Reinvestment Trust (WRT) £150,000 Revenue, £450,000 Capital
WRT is a wide-ranging organisation intending to address social
exclusion, business development, personal finance and property
matters (both residential and commercial) among rural communities in
Devon, Somerset and Dorset. Phoen ix Fund support would be focused on
start-up and SME lending. SWERDA believe there is a definite need for
a CDFI to serve the rural communities of Wessex.
East of England
Several proposals are currently under review for possible support in
next tranche of projects.
1066 Enterprise Ltd (1066) £90,000 Revenue, £500,000 Capital
1066 plan to make loans of between £3,000 and £25,000 to start-ups
and growing businesses located in East Sussex. Research undertaken by
1066 shows that 36% of start-ups in East Sussex are unsuccessful in
accessing finance agaist a national figure of 24%. SEEDA are
supportive of the 1066 bid and have confirmed that the Hastings area
is recognised as facing significant economic challenges problems and
is not currently served by a CDFI.
Enterprise Agency of North Kent (EANK) £165,400 Revenue, £301,500
EANK intends to make loans of up to £5,000 to start-ups and up to
£15,000 to existing for-profit SMEs and social enterprises. EANK will
particularly serve the BME community, the unemployed, women
entrepreneurs and social and community enterprises. SEEDA believe
there is a strong need for a CDFI in North Kent.
Fredericks Foundation (Fredericks) £237,578 Revenue, £750,000 Capital
Fredericks already make loans of between £500 and £5,000 to
individuals, especially lone parents, ex-offenders and the disabled,
seeking to start their own businesses. Phoenix Fund support will
enable Fredericks to broaden the geographic scope of their operations
in Berkshire, Hampshire, Surrey and Sussex. Fredericks is unusual in
that that it is a private sector solution, which was created by a
successful entrepreneur who wished to put something back into the
community by giving others the opportunity to start a business. SEEDA
Ethnic Business Development Corporation (Ethnic Mutual) £77,0 00
Ethnic Mutual plans to make loans of between £500 and £20,000 to
primarily, but not exclusively, the black minority ethnic (BME)
community in London. Ethnic Mutual believe that their proposed fund
will enhance their existing strong links with the BME community. The
LDA believes that Ethnic Mutual could provide useful coverage in
areas that currently do not have access to a CDFI, especially in
South and West London. Ethnic Mutual are only seeking revenue support
as they believe that they will be able to raise the necessary capital
from banks, wholesale CDFIs and from among the BME community.
Hackney Business Ventures Enterprise (HBV) £214,221 Revenue, £750,000
HBV make loans of between £3,000 and £25,000 to start-ups and
existing businesses seeking to grow. HBV have previously received
Phoenix Fund support and have a successful model that they are now
keen to replicate in the boroughs that border those that it already
serves in the North East of London. The LDA are supportive of HBV's
focus on enterprise growth and the fact that it is extending
geographic coverage. By building upon existing work the proposal
provides some scope for useful economies of scale.