BSSEC member ART Business Loans has just announced the launch of a major community share offer aimed at raising £500,000 from individuals and organisations that can be lent to businesses, social enterprises and third sector organisations in the West Midlands, enabling them to protect or create local jobs.
The share offer is being made in partnership with Ethex, a leader in ‘positive investment’ — putting investors’ money directly into businesses whose social mission and impact the investors support.
ART’s chief executive, Dr Steve Walker, who was recognised in 2018 as Responsible Finance Leader of the Year, says the money raised will be used to support business, enterprise and innovation by offering loans to viable businesses that cannot access any or all of the finance they need from the banks. “Having access to appropriate finance will enable those businesses to invest in people, premises and equipment, and support growth or diversification. Our current loan portfolio is over £5m and we are seeking additional capital through this community share offer to enable us to lend even more to West Midlands businesses in the year ahead.”
Shares in ART are eligible for Community Investment Tax Relief (CITR) which offers individuals and companies tax relief at 5% per annum of the sum invested over five years off their UK income tax or corporation tax. At the end of that time the shares may either be withdrawn or reinvested in ART. But as well as CITR the scheme also offers lenders additional security via an Enterprise Finance Guarantee (EFG) from the British Business Bank. Using both CITR and EFG in conjunction represents a first for the social finance sector, Steve Walker says.
“In addition to receiving this financial return, investors will be putting their money to work for the benefit of the local economy,” says Steve. “Research shows that there are many small to medium sized enterprises in the West Midlands which remain unable to access appropriate finance to support their business plans, despite new alternative sources to the banks entering the market over the past ten years. Many of these new sources have similar lending criteria to the banks or are charging very high interest rates. We are all about providing responsible finance and bring our expertise to bear in making lending decisions.”
The share offer will be open from 7th January to 24th March 2019 and can be taken up by either individuals or organisations. The minimum investment is £500 and the maximum £100,000.
→ Anyone interested in the investment opportunity can register to buy shares and read the full share offer document HERE. Investors should be aware that their capital will be at risk.
→ You can find out more about how CITR works HERE.