Finance News: South East gets enterprise fund

Mathew Little

A £500,000 loan fund has been established to help social enterprises in the South East.

The South East Community Loan Fund is the region's first community development finance initiative, and aims to boost enterprises working in deprived areas.

The fund is available to charities and their trading arms, as well as community enterprises involved in regeneration and companies making a social impact in disadvantaged communities.

The fund has been launched by the government-funded South East England Development Agency. Its chief executive Pam Alexander said: "A recent mapping study of social enterprises in the South East found that 50 per cent of them cited access to capital funding as either a large or very large barrier to future expansion. The loan fund addresses this issue in a very positive and dynamic manner, and will be a critical factor in both providing new jobs and enhancing the business skills of many across the region."

The agency is looking to attract further investment from alternative sources, such as banks, wealthy individuals, housing associations and large charities in order to enable the fund to grow.

"I hope that Seeda's significant investment will act as a catalyst for securing the involvement of private sector partners in the fund as the venture evolves," said Alexander.

Steven Heaton, the agency's PR manager, said the organisation would have to dispel the image of the South East as a universally prosperous region.

"According to government figures, 119 of the most deprived wards in the country are in the South East," he said.

Loans of between £10,000 and £100,000 are available. The funds are intended for organisations unable to secure finance from commercial sources such as high street banks.

The money can be used to purchase capital equipment or property, refurbish buildings and provide bridging finance or working capital. A professional business plan is required with each application.

The fund will be managed by the Local Investment Fund and Finance South East, which advises small and medium-sized companies. Mike Baker, chief executive of the Local Investment Fund, commented: "We are delighted to be working collaboratively with Seeda on this valuable initiative, which will be enthusiastically received by a tremendous number of organisations.

"Securing finance in the business world for social enterprises can be a daunting and frustrating experience, but this fund will help to dismantle some of those barriers and enable those businesses to concentrate on making a dramatic difference to their local communities. It will also accelerate greater economic prosperity for the region," said Baker.

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