£1.4 million loan fund for future entrepreneurs
>>> Posted 18/06/2007
A £1.4 million loan fund has been created to help entrepreneurs in some of the most disadvantaged areas of Leeds set up and grow their own businesses. The fund will offer competitive rates of interest on business loans for individuals and businesses unable to access finance through traditional sources such as banks and building societies.
It has been created by the Leeds LEGI (Local Enterprise Growth Initiative) programme in partnership with the Business Enterprise Fund and Leeds City Credit Union, to encourage enterprise in some of the city's poorest communities.
Recent research suggests that residents in areas such as Harehills, Beeston, Chapeltown and Gipton face difficulty obtaining loans from the usual high street lenders. As a result many turn to doorstep lenders who charge much higher interest rates, and this could be costing the local economy as much as £9.5 million per year.
Working with Leeds City Credit Union, £1 million of the total loan fund has been allocated to provide help exclusively for start up businesses in disadvantaged areas of the city. The fund will offer loans of up to £5,000 to help entrepreneurs get the first step on the business ladder.
Leeds City Council's 'Exclusion to Inclusion' report interviewed residents from some of the poorest areas in the city and found that 20% of people interviewed would be interested in taking out a business loan but can't access the high street lenders due to poor credit histories, bankruptcy, or high levels of existing debt.
