The responsible finance industry is playing a vital role in supporting thousands of small businesses and lower-income consumers who feel left behind, according to new research published today by trade body Responsible Finance. By extending access to fair and affordable credit, in 2016, the responsible finance industry helped Britain’s businesses to create and save over 20,000 jobs and enabled 37,000 ‘just about managing’ households to build financial capability and resilience.
The Responsible Finance Regional Growth Fund (RGF) programme reached a milestone in 2016, fully lending out the entire £60 million. The fund was a public-private match fund between the Department for Business, Energy, and Industrial Strategy (BEIS) and the Co-operative and Unity Trust Banks. The catalytic 50% grant from BEIS provides first loss cover and leverage for the 50% match investment from the banks. Through the RGF programme, responsible finance providers supported 2,000 businesses, creating and saving 7,800 jobs across England. This added an estimated £313 million to local economies across the country. With good value for money, the cost per job to the government is £3,800, only 10% of the average cost per job for the entire RGF programme.4
Case study: Estrella Bikes gets moving with SWIG Finance
Estrella Bikes of Verwood in Dorset, owned by childhood friends – highly decorated Paralympic cyclist Darren Kenny OBE and engineer Rob Ellis – started as a hobby in 2009 when Darren started making one-off bikes. Last year, both partners decided the time was right to expand Estrella Bikes into a business manufacturing carbon fibre bikes on a built-to-order basis. They secured a loan from SWIG Finance, a responsible finance provider, worth nearly £20,000 to get underway, following founding principles of quality, affordability, classic style, mutual trust and five-star customer service.
Darren says: “My background is in cycling and Rob is an incredible engineer but neither of us knows much about business! Accessing that support and guidance from SWIG Finance during the application process and the ongoing mentoring support has been beyond valuable. The funding from SWIG Finance will also enable us to approach factories directly to access componentry which means we will be able to sell the bikes through specialist shops rather than only online and built to order.”
The full report is available to read here.