BCRS Business Loans is to invest in businesses looking to grow and boost employment opportunities in the West Midlands and Wales through an innovative fund backed by a mainstream lender.

Lloyds Bank has become the first major banking group to finance loans for delivery through socially motivated Community Development Finance Institutions (CDFIs) including BCRS Business Loans by backing the new £62m Community Investment Enterprise Fund (CIEF) which aims to invest in 800 small businesses nationally and support 10,500 jobs.

Funded by Lloyds Bank, along with social impact investor Big Society Capital (BSC) and contributions from the three participating CDFIs, BCRS Business Loans, Business Enterprise Fund and Finance for Enterprise, the CIEF will provide capital needed by small businesses.

BCRS will offer CIEF investment to SMEs across the West Midlands and Wales who are unable to access finance from traditional sources by providing secure loans from between £10,000 and £150,000 to support growth and recovery plans. The new fund for small businesses operating in economically disadvantaged areas, which follows a successful first phase of CIEF funding, will be managed by Social Investment Scotland (SIS), which has been investing in the social sector since 2001 and is itself a CDFI.

Stephen Deakin, Chief Executive, BCRS Business Loans said: “The backing of Lloyds Bank is a game changer for business funding in the West Midlands and Wales, offering new opportunities to kickstart economic growth through the CIEF.

“BCRS Business Loans is delighted to support the delivery of the new CIEF, building on the impact we made by supporting a diverse range of businesses to grow and increase employment during the first phase.

“With the support of Lloyds Bank, the investment scheme will help ensure we continue to provide much-needed finance to small businesses across our region while stimulating local communities, creating jobs and driving economic growth. We look forward to building on our new relationship with Lloyds Bank to support business success for companies in some of the most economically challenged areas in the country to bring further positive social impact.”

BCRS customers to benefit from CIEF funding in the first phase included the owners of Beacon Barkers, in Stoney Bridge, Stourbridge, who secured £100,000 to support the acquisition of the kennels business and safeguarded seven jobs in the process.

Four new jobs have been created since Carrena and Darron Burness bought the company. Daycare and dog walking services have been launched as Carrena and Darron realise their ambition of running a kennel business, living on-site with their two sons.

Darron said: “Through the CIEF support we have been able to turn around a local kennels business while not just supporting ourselves but also staff and the local community. We have increased capacity to get more dogs in, we have taken on an apprentice and provided work experience for dozens of young people by partnering with Halesowen College.

“The CIEF investment has meant we could take on a business which has become a way of life for us, with more plans in the pipeline, including more community involvement. Our customer reviews are very good and we have built a business which is as much a community place as a commercial one.”

Fitness Worx Gyms secured £100,000 to open its training centre in Stratford-upon-Avon, creating new jobs. Having opened centres focused on personal training and group classes across the West Midlands, Fitness Worx Gyms received funds to buy its new location and purchase equipment.

Jack Gibson, Managing Director, said: “By securing the funds, we were able to open with much higher quality equipment than we could have done otherwise, creating the best possible customer experience from the start. We are already up to 300 members in less than a year, not only hitting our revenue targets earlier than expected but also providing jobs for three people and allowing us to look to open more premises as we continue to grow.”

The partners behind the new CIEF fund look forward to seeing it make an impact in job creation and growth.

Elyn Corfield, CEO Business and Commercial Banking, Lloyds Bank, said: “We are delighted to support the CDFI sector to back local businesses, with a focus on deprived areas, and ensure they have access to a range of financial options right for them. When local businesses flourish so do local communities and we hope our leadership within this second phase of CIEF will see many more areas of the UK succeed.”

Alastair Davis, CEO, Social Investment Scotland said: “What we have achieved through CIEF since its launch provides evidence that investing into under-served communities, and place-based approaches are both possible and credible. This new phase provides a continuity of capital and an opportunity to build on the good foundations already laid.”

Responsible Finance and the Impact Investing Institute have played key roles in bringing the second phase to fruition along with the three participating CDFIs and Big Society Capital.

Anna Shiel, Chief Investment Officer, Big Society Capital said: “We are thrilled to see the work of partners come together in the next stage of CIEF and especially to see how the positive track record of these CDFIs is being noticed!”

Kieron Boyle, CEO, Impact Investing Institute said: “It is great to see Lloyds become the first commercial bank to show long-term commitment to the sector and invest in CIEF. This is a landmark moment for the sector which we hope will pave the way for other mainstream banks to invest in CDFIs.”

Theodora Hadjimichael, CEO of Responsible Finance which represents the UK’s CDFIs, said: “We are thrilled to welcome Lloyds Bank’s commitment to our sector and the small businesses we serve, alongside BSC’s valued longstanding support. As we announce this historic investment, we urge other mainstream banks to join Lloyds.”

The CIEF announcement comes after BCRS Business Loans was appointed as a fund manager for the new £130 million Investment Fund for Wales in November and for the Midlands Engine Investment Fund II, announced last week, which will deliver a £400m commitment of new funding for businesses across the Midlands.

Since BCRS Business Loans was founded in 2002, it has provided loans worth more than £85 million to businesses. A social impact report for the last financial year showed BCRS lent £6.5m to 72 businesses, safeguarding 999 jobs and creating 473 roles, adding £33.7m in value to the economy of the West Midlands and surrounding regions.