A £60 million pot of Regional Growth Fund (RGF) investment and bank finance was announced by Business Secretary Vince Cable yesterday, to protect jobs and fund investment and growth for small to medium sized enterprises and micro businesses.
Launched at the Community Development Finance Association’s (CDFA) annual conference on Thursday 4 October, the funding is expected to create or safeguard over 8,000 jobs over six years and meet some of the growing demand from small businesses for access to finance.
“It makes a very nice change to see something positive coming out of government,” said HEAT Federation director Alan Black. “With the tough economic climate at present there is precious little investment being made available for SME’s, which are after all the lifeblood of the UK. Banks are notorious for not supporting SME's let alone micro businesses and any action which releases funds for investment into our sector has got to provide the opportunity for benefits to be achieved.”
At the conference, Cable set out the important role that Community Development Finance Institutions (CDFI) have in providing credit to under-served markets.
“We need effective channels to support small business which is why the CDFA and its members are so important for providing access to finance and kick starting the economy,” he said. “They are best placed to ensure that the £60 million goes to those SMEs that will create jobs and unlock private investment.
"Regional Growth Fund programmes have already awarded SMEs over 500 grants and loans across the country. This is an excellent way to get value for money, but more importantly, it is a good way to focus on local priorities for growth, as most programmes are led by local partners. RGF is leading the way in rebalancing the economy and boosting business and industry.”
Ben Hughes, chief executive of the CDFA said the investment was an exciting and timely milestone for the sector.
“This investment is critical to the survival of many small and micro businesses who, without this support, would simply not exist,” he said. “Greater investment like this offers a new way of creating wealth that’s sustainable and ethical yet that also makes sound business sense.”
Keith Alderson, managing director, Corporate and Business Banking, The Co-operative Bank, said: “As a co-operative, we fully understand the important role small businesses play in communities by creating and sustaining jobs and helping to develop local economies.
“We are delighted to be supporting CDFA and the Regional Growth Fund, with this innovative and exciting initiative. It will deliver much needed finance right in the heart of communities. Our involvement is further demonstration of a commitment to play our part in supporting those businesses and social enterprises so vital to stimulating economic recovery.”