Member Article

£5m in loans available to start up and growing North East businesses

Entrust is aiming to support around 350 new and growing small businesses in the North East with available funds totalling £5m over the next two years.

The Newcastle-based business support and enterprise agency has provided loans of £3.6m to help over 300 businesses launch or expand against the backdrop of the recession since 2011.

It is now making £5m available in the form of £2.6m to micro-businesses and start-ups and £2.4m from the Growth Fund for expanding existing businesses.

The North East Microloan fund provides loans of between £1,000 and £25,000 and is targeted at new and existing businesses which have faced difficulty securing funds from mainstream lenders. Sole traders, partnerships, third sector enterprises and people from disadvantaged backgrounds are being particularly encouraged to apply. The fund is part of the £125m Finance for Business North East Programme, financed by European money.

The Entrust Growth Fund issues loans of up to £50,000 per business to buy assets or equipment or provide essential working capital. With an emphasis on creating or safeguarding North East jobs, the fund is also aimed at micro and SMEs which have had problems accessing funding elsewhere.

Entrust offers additional help specifically targeted at new enterprises via its Government-backed Start-up Loans fund for young people aged 18 to 30, which provides loans from £250 and business mentoring support.

Entrust CEO Dan Brophy said: “In the last two years as the UK has struggled out of recession, we have helped over 300 North East businesses that had problems accessing finance with loans totalling £3.6m.

“Restrictions on access to credit was one of the first blows that businesses faced when the economy nosedived, and we’re still a long way from the pre-2008 days when securing business funding was a relatively easy process.

“Now as the recovery starts to take root, we want to ensure North East entrepreneurs and smaller firms aren’t left behind because they can’t secure the investment they need. This £5m is available now and we want to hear from businesses and start ups that need our help.”

Analysis of the 2011-13 figures shows that more than three-quarters (76%) of applications to the Entrust funds were men, although women’s applications tended to be more successful with 71% of female applications being approved. Overall, 56% of all female applications and 45% of all male applications were given the green light.

People in their 30s and 40s made up six out of 10 applicants, and more than half of this age range (52%) successfully secured loans from the funds. Both older (50+) and younger (18-30) people account for 42% of the successful applications.

“As expected, funding applications for existing businesses were mainly from people in the 41-50 and 50+ age groups, with nearly seven out of 10 applicants in this age range,” said Mr Brophy.

“But perhaps what is surprising is that applications for start-up help were fairly evenly split, with 53% from people aged 18 to 30 and 47% from the other age ranges. Perhaps this is a reflection of the economic situation, where increasing numbers of people are deciding to set up their own businesses straight from university, or where they have been made redundant or faced the threat of redundancy.

“It will be very interesting to carry out a similar analysis in two years time to see how the current £5m in funding has been allocated.”

This was posted in Bdaily's Members' News section by Astute.Work .