(l-r) Graham Donaldson, Martin Edmonds, Roz Haque, Andy King, Chris Allen-Lloyd, Barbara Seaton, Steve Walker. Photographer: Marc Kirsten.
ART Business Loans (ART), one of the UK’s first community development finance institutions, set up to lend to businesses unable to access finance from the banks, is celebrating its 20th birthday this month.
“As a social enterprise, established as a mutual society, ART’s primary objective was, and remains, to support access to appropriate finance for business and the creation or preservation of local jobs for local people,” said Steve Walker, chief executive of ART since before its launch.
“We were set up as a result of a report from a commission chaired by the late Sir Adrian Cadbury, who became ART’s first chairman. One of the major areas the commission looked at was access to finance for people and communities who were finding it increasingly difficult to engage with the banks.
"Strictly speaking we lend in addition to the banks – only if they can’t help and often lending alongside them as part of a package of finance. However, we are now considered to be a part of the ‘alternative finance’ market, which has grown substantially over the past 20 years and includes peer to peer lenders and crowd funders.”
Walker says that the banks were starting to move away from funding for small businesses, and particularly micro businesses with up to 10 employees, in 1997 when ART first opened its doors as Aston Reinvestment Trust - based in Aston but lending across inner city Birmingham. That trend became exacerbated after the credit crunch of 2008, so that ART – and lenders like it – are needed now more than ever.
“Banks are still the largest lender to small businesses by total value,” says Walker, “but they are no longer the first port of call for many small or start-up businesses. The banks can’t make enough of a return at that end of the market, because the loans required are smaller and the risk is higher. Our average loan size is £35,000 – a sum which it is particularly challenging to get elsewhere, even from the newer peer to peer lenders.”
Based at Innovation Birmingham Campus in Aston, ART now lends across the West Midlands, offering £10,000 to £150,000 to businesses unable to access any or all of the finance they need from the banks.
ART’s highly experienced staff team, which is supported by a volunteer board of directors, adopts a personal approach to lending, which is highly valued by its clients. The Loans Managers understand what it’s like to run a small business and are keen to visit and understand their clients. They are able to offer valuable information about finance options and will signpost to other finance providers where appropriate.
Since June 1997 ART has lent over £21m to more than 900 local businesses, which as a result have been able to create or preserve over 7,000 jobs. Borrowers have come from diverse market sectors and used the loans for a variety of business purposes, including to support cashflow.
“We have grown significantly over the past three years as demand for loans has increased,” says Walker. “So whilst we reflect on what we have achieved over the past 20 years – enabling viable businesses that couldn’t get vital finance from elsewhere to survive, thrive and grow – we are also looking ahead, seeking additional funding and considering how we can continue to best serve the local economy in the years to come. We have money to lend now and urge businesses in need of a loan to get in touch.”