A report has urged authorities to recognise the importance of the CDFI lending sector in bridging the funding gap for small businesses in the West Midlands.
Big Society Capital and Citi recently shared its report on ‘Scaling up Community Investment in the UK’ which says that combined authorities, local authorities and Local Enterprise Partnerships must ‘actively consider the role of CDFIs in delivering inclusive growth.’
Community Development Finance Institutions (CDFIs) have a social mission of increasing access to finance for viable businesses that are underserved by traditional lenders.
West Midlands-based BCRS Business Loans is a prominent member of the CDFI sector and has supported 1,500 businesses since it was established in 2002.
Paul Kalinauckas, Chief Executive of BCRS Business Loans, said:
“We are pleased that this report has highlighted the important work the CDFI sector is doing to increase access to finance for small and medium sized enterprises (SMEs).
“SMEs are the backbone of our economy and make up 99 per cent of all businesses and employ a massive 12.9 million people. Yet, despite this, many viable SMEs are still finding it incredibly difficult to access finance from traditional sources, such as banks, which stalls their growth.
“We have an incredibly successful track-record of delivering both public- and private-sector funds to support growing businesses, create jobs and ultimately have a positive economic and social impact. To date, our lending has generated an additional £270million of value in the West Midlands economy.
“We would welcome meeting authorities to discuss our common mission of supporting the growth and prosperity of local SMEs and how we can work together to achieve this.”
Paul Brown, Black Country LEP Board Member and Chair of the Access to Finance Group, commented:
“BCRS has already pumped over £50 million into the small business sector across the West Midlands. Scaling up their role will enable the region to grow the local economy, particularly through small businesses who may otherwise struggle to obtain finance”
Staffordshire County Council’s economic growth leader Mark Winnington said:
“Small businesses play a vital part in Staffordshire’s ongoing economic growth and employ thousands of people.
“Our loan fund with partners BCRS has been a huge success in Staffordshire and the results speak for themselves. It has supported over 200 businesses to the tune of nearly £6million. The fund helped to create 549 jobs and protect 762. It is estimated that the total economic impact generated is £30million.
“The fund achieved exactly what we wanted it to – namely enabling businesses to grow by overcoming access to finance issues.”