Member Article

North East businesses urged to seek alternative finance

The Community Development Finance Association (CDFA) has urged North East SMEs to apply to community development finance institutions (CDFIs) to gain access to finance from the Regional Growth Fund (RGF).

CDFIs provide vital fair-cost loans to businesses otherwise unable to secure mainstream finance.

The institutions across England have £40 million to lend to local business and social enterprises as part of the Government backed RGF scheme.

CDFIs in the North East have so far lent £772,690 from the RGF funding, providing 75 loans to local, small businesses, creating and safeguarding 100 jobs.

With SMEs and social enterprises struggling to access high street bank lending, they are being encouraged to apply for alternative finance lending.

Teesside based CDFI, Five Lamps, has been lending to local businesses including SMEs and micro-enterprises in the North East for over 10 years.

After successfully applying for RGF funding through the CDFA, Five Lamps has issued nine RGF loans with a total value of £256,950 in 2013/14 and a further three loans with a total value of £65,000 in 2014/15 thus far.

Director of economic development and finance at Five Lamps, Bill Erskine, said: “As an organisation we are committed to stimulating employment and growth through access to loan funding and encourage local businesses in the North East to access the money available through the Regional Growth Fund.”