The move is designed to improve access to finance for small to medium sized enterprises in the West Midlands, and enable them to create and preserve jobs.
Based at Innovation Birmingham Campus in Aston, ART lends between £10,000 and £150,000 to businesses unable to access the finance they need from banks. Working with ThinCats, ART is trialling raising money to lend on to businesses.
This initiative is part of ART’s continued planned expansion to meet demand from West Midlands businesses, following a third record year of loan delivery in 201516.
Steve Walker, chief executive of ART Business Loans said: “We have seen an increase in applications in the first quarter of this financial year, with loans delivered in excess of £900,000, and we fully expect to see further increased demand in the months ahead.”
ART Business Loans, a social enterprise and member of Responsible Finance, has worked with other Responsible Finance members across the UK to develop the ThinCats Community Chest offer. Investors will have the opportunity to make a loan to ART for a five year term, which will benefit from Community Investment Tax Relief at a rate of 5% p.a. of the amount lent for five years.
This is an attractive offer in today’s investment climate, providing both a financial return - 8.2% p.a. for a higher rate tax payer - and a social return – support for jobs in the local economy. All of the money raised will be lent to businesses in the West Midlands.
ART was launched in 1997 as a local mutual lender and since it started ART has lent over £20m to more than 900 local businesses, All original investments have been maintained and are still being used today.
As a result of these investments, businesses in the region have been able to create or preserve over 7,000 jobs.
Average loan amount in the last three years has been £35,000. Steve Walker said: “It is loans of this size, so important to smaller businesses, that are of least interest to the banks and many other providers. That is why it is vital that lenders like ART exist, with a remit to fill gaps in the business finance market.”
ThinCats Founder and Chairman Kevin Caley said: “Community Chest is breaking new ground by providing a unique and tax-efficient way of investing in P2P, which I believe will be popular with investors, while delivering a vital new route to funding for social enterprise right across the UK.”
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