New £5m fund to help SMEs cope with crunch.

A NEW loan fund worth £5m has been launched in Yorkshire to help businesses cope with the credit crunch.

Yorkshire Forward announced the ‘Transition Loan Fund’ as part of the regional development agency’s  efforts to support regional businesses through the recession.

The announcement was made during a visit to fittings, taps and valves manufacturer Pegler Yorkshire which has been awarded a Grant for Business Investment of up to £3m through Yorkshire Forward and the Department for Business Enterprise and Regulatory Reform.

This support will allow the the firm to invest a further £12m in new machinery that will improve the efficiency, capacity, quality and safety of its Doncaster site.The new loan fund, which can be accessed through Business Link Yorkshire, has been designed to provide small to medium sized businesses in the region with working capital to help them maintain liquidity in their business.

• The £5m loan fund will be available to businesses over the next six months with a view to extending it up to a year depending on demand.  The fund is being focused in three key areas, all of which can be accessed through Business Link Yorkshire.
• A £1.2m small loans pot will be available for working capital of up to £50,000 for small businesses across the region.
• A £1m business angels co-finance scheme will allow companies to access finance from both Yorkshire Forward and regional business angels, who invest both capital and management experience and expertise in companies wanting to develop their markets.  Loans will typically be in the range of £25,000 to £100,000. 
• A £2.8m large loans scheme will provide general loans in the region of £70,000 to £100,000.

It adds to the existing support being made available by Yorkshire Forward and Business Link including; Grants for Business Investment, free financial health checks worth up to £2,000, a £43m research and development grant fund and a £10m extension to regional venture capital and loan funds PIF and SYIF. A new regional venture capital fund worth up to £120m is currently also in development to be launched later in the year.

Yorkshire Forward chairman Terry Hodgkinson said: “Although our region is better placed to weather this downturn than previously and many sectors continue to perform well, business is tough at the moment and our job is to provide the support that can help our region’s businesses tackle the challenge head on.

“We are not here to act as another bank, or to step on the toes of the banking sector and we are looking to closely with the banks to ensure the financial needs of the region’s businesses can be met via traditional routes and our support.  We want to ensure well managed, sustainable companies can manage their credit successfully so that they can weather the downturn. 

“The transition loan fund adds to the support that we are already making available in the region and will help to ensure even more businesses can continue to operate and hopefully expand, despite the recession.” Department for Business Minister Pat McFadden said:

“Access to finance is key to helping businesses through these difficult times. Through this fund local firms can get the support they need to bridge short-term gaps and secure their futures. This is of particular value to firms in the supply chain where a major customer has run in to difficulty.

“We will do all we can to support companies in Yorkshire and Humber, and across the country. This is just one part of a wider programme of real help for businesses. We also recently announced loan guarantees and a new enterprise fund, aimed at helping companies struggling to access finance for working capital and investment”.

[Published with permission of www.TheBusinessDesk.com]