Who wants to invest in their own back yard?

Who wants to invest in their own back yard?

In the mid 1990s Sir Adrian Cadbury led the development of a pioneering community finance initiative, which resulted in the establishment of Aston Reinvestment Trust (ART)

As a mutual society, ART raised money from local individuals and companies to lend to local businesses unable to meet their requirements from the banks. ART’s remit
was, in Sir Adrian’s words, “to create local jobs for local people”.

For its investors this was a true ‘social investment’ with no thought of a financial return. It was taken up by companies such as Wesleyan, IMI, Severn Trent and Jaguar in addition to all the major banks and individuals such as Cadbury family members, Lord Digby Jones and many others. The social returns were provided by ART delivering on its mission to ensure viable businesses could access the finance they needed, boost the local economy and help to ‘alleviate poverty through enterprise’.

Investments in ART Business Loans qualify for CITR
Nearly 20 years on and the rebranded ART Business Loans are still going strong, finding that they are needed as much in the post credit crunch landscape as ther ever were. As a Community Development Finance Institution, ART is able to offer Community Investment Tax Relief (CITR) to its investors in addition to a social return.

CITR offers 5% per annum of the amount invested off personal or corporate tax liabilities for five years. Full CITR offers a return of 6.3% to a standard rate tax payer, more for a higher rate tax payer.

Over the years, ART has retained the value of its social investors’ funds and used them to leverage further private sector, as well as public sector, funding from national and local sources.

Montage

Delivering Social and Economic Value
Initially ART’s lending was targeted in Inner City Birmingham, but over time its remit has expanded and it now lends to business across the West Midlands. Since the credit crunch the size of the businesses ART supports has increased, but its average loan size is around £35,000. “This is the size of loan which means so much to small and medium sized enterprises, but which is the hardest to get from many other funders,” says Steve Walker, Chief Executive of ART Business Loans. He sees ART’s role as helping things to happen which otherwise wouldn’t.

“Since we started in 1997,” he says, “we have put over £20m into the local economy and enabled around 900 businesses in the West Midlands to create or protect almost 7,000 jobs. They have been able to start up, survive, grow, diversify and meet their objectives, but it’s not just the businesses that have benefited – it’s also employees, who have been able to keep or get a job, and their families, as well as the public sector, which has been able to save money in benefits that might otherwise have been required.”

Borrowers have included businesses in almost every market sector, including: training and business support; design and manufacturing; food and catering; health and wellbeing; IT, digital and media; leisure and entertainment; retail and social enterprise.

Localism is high on the agenda
“Things have come full circle recently,” says Steve. “With the end of the Regional Growth Fund, which we have had since 2012, the Government is pushing a devolution agenda and encouraging us to seek primarily local support. We are exploring a number of options, including some that will show our pioneering spirit is still there!”

For more information about investing in, or borrowing from, ART Business Loans see
www.artbusinessloans.co.uk or call 0121 359 2444.