ART pioneers new financing model to raise cash for small businesses

ART_Business_LoansThinCats_-_an_online_peer_to_business_lending_platform

ART Business Loans has joined forces with peer-to-peer business lender ThinCats to pilot a unique scheme to raise £500,000 to support local businesses. ThinCats — it’s the opposite of ‘fat cats’ — was established in 2011, partly as a response to the banking crisis.

Working with Responsible Finance members across the UK, including Birmingham’s own ART Business Loans, ThinCats has developed a new Community Chest initiative enabling investors to make a loan to ART for a five year term, which ART will then lend on to West Midlands businesses. Investors will benefit from Community Investment Tax Relief at 5% p.a. of the amount lent for five years.

This is an attractive offer in today’s investment climate, providing both a financial return — 8.2% p.a. for a higher rate tax payer — and a social return by supporting employment in the local economy.

The move is designed to improve access to finance for small to medium enterprises in the West Midlands, and all the money raised will be lent to SMEs and social enterprises in the West Midlands.

ThinCats’ founder Kevin Caley says, “Community Chest is breaking new ground by providing a unique and tax-efficient way of investing in peer-to-peer lending. I believe it will be popular with investors and can deliver a vital new route to funding for social enterprise right across the UK.”

Steve Walker, ART CEO [Photo: Marc Kirsten]

This initiative is part of ART’s continued planned expansion to meet demand from West Midlands businesses, following a third record year of lending in 2015/16. “We provided loans in excess of £900,000 in the first quarter of this financial year,” says ART CEO Steve Walker, “and we fully expect to see further increased demand in the months ahead.”

 

Birmingham UK. Freelance research, evaluation and policy consultant specialising in social enterprise and the third sector. I maintain the BSSEC blog and website

Leave a Reply