SWIG Finance’s annual Impact Report has been published for 2022/23, and the findings show another record-breaking year of impact lending.
Over £14m in funding was provided by SWIG for small/medium businesses across the South West, many of which were not able to source funding from mainstream providers. This represents over £44m of impact value.
The Outcome of Impact Lending
In 2022/23, SWIG Finance beat all previous activity levels by providing 559 loans worth £14m to 478 start-ups and growing SMEs throughout the region, who were not able to raise the finance they needed from their bank. Of these loans, 40% were made to women-led businesses and 13% to ethnic minority-led businesses.
This lending helped create and safeguard 1,482 jobs within established small businesses, and a further 414 new start-ups were created. The combined economic benefit generated by the lending totalled more than £44 million (impact values generated through the CDFI Economic Impact Tool).
Outputs are monitored according to the UNSDGs, including investment into the most deprived areas of our region. In 2022/23 SWIG lent £3.2m in lower layer super output areas (LSOAs).
Record Lending and Business Confidence
Throughout the financial year, the business community witnessed various external shocks, which presented new challenges and headwinds: rising energy and other input prices, staff shortages, and higher interest rates, to name just some. Business confidence declined as the year progressed. Yet against this backdrop, SWIG was able to help a record number of SME sector businesses with their financial needs.
Of the overall £14m lent, which is 30% more than the previous year, £7.8m was lent to growing SME businesses via SWIG’s Business Loans, and £6.2m was lent to start-up and early-stage businesses through the British Business Bank’s Start Up Loans Scheme.
It’s important to note that while some 40% of lending went to entrepreneurs creating new businesses, 53% of lending to established SMEs was to support growth and productivity.
Of this year’s lending statistics, SWIG’s Managing Director, John Peters, commented “I’m proud that we have supported so many remarkable entrepreneurs and small business owners. These resilient, determined, and creative people are building enterprises that are not just surviving but thriving – and making a positive difference to their local communities”.
The Need for Non-Bank Lending
The need for responsible, non-bank lending amongst the region’s small businesses and start ups has never been clearer, and SWIG continues to make finance as accessible as possible. Instead of competing with the banks, CDFIs, like SWIG Finance, lend to businesses that are excluded from mainstream lenders due to finance criteria or automated credit scoring methods.
Furthermore, traditional lenders will judge businesses on historic performance but for growing businesses, this can be far behind current trading or trajectory. Hence, SWIG’s focus on understanding the future as well as the past indicators.
SWIG Finance assesses each business on its current merit and future opportunities and can support businesses that are projection-led and demonstrate a stronger forecasted performance compared to previous years. By understanding what sits behind the forecasts, such as contracts won and sales pipeline, decisions are made based on the credibility of the forecasts.
Furthering Our Impact
As an impact lender, generating positive social and economic impacts is at the heart of what SWIG does and is inherent to our decision-making alongside economic assessments.
This year, SWIG looked to further its impact by committing to supporting Babbasa, a youth empowerment programme in Bristol. By signing up three staff members as Equal Opportunity Ambassadors, SWIG is pleased to be playing a part in kickstarting the careers of disadvantaged young people in the City of Bristol.
As well as this, SWIG was delighted to donate to the charity Man Down Cornwall. By sponsoring team member, Charlie Martin, who ran a marathon to help raise funds. Charlie’s team raised more than £1,600 for the charity.
What the Future Holds for SWIG
SWIG continues to look ahead and anticipates delivering even more impact lending over the next 12 months.
Having recently secured new contracts through the British Business Bank, including the £20m Smaller Loan Fund as part of the South West Investment Fund, and the South West regional contract for the Start Up Loans scheme, SWIG will continue supporting those businesses that are unable to source funding through traditional means.
Significant new lines of capital for on-lending from ethical sources (social investment banks) have also been unlocked, enabling SWIG to support more excluded businesses than ever within an ethical framework to generate positive impacts.
Final Words
As SWIG Finance strives to make the South West’s financial eco-system more balanced and inclusive, it’s important to note that this can only be achieved through its collaborative network of business support agencies, accountancy firms, banks, commercial brokers, and intermediaries.
SWIG would like to thank its extensive network of supporters, stakeholders, customers, and staff for helping them to achieve record levels of lending.
If your business, or your customer’s business, has been unable to secure the funding it needs to grow, please get in touch and speak to an advisor to find out how SWIG Finance can help you.
Get in touch on 01872 227 930 or info@swigfinance.co.uk
Download the full social impact report here.