The plan comprises two elements - allowing the Advantage
Transition Bridge Fund (ATBF) to recycle loan repayments into new
loans, thus enabling it to keep lending until 30 November 2009, and
releasing £2 million as a pilot for a new follow on fund to
be fully launched later in the year.
The emphasis of this pilot fund will be more on supporting
businesses with strong growth prospects, rather than meeting short
term liquidity problems which was the focus of the original
Transition loan funds.
The RDA Transition loan funds were introduced in November 2008
as a short term measure to assist viable companies who were
experiencing problems in obtaining credit. The West Midlands' fund
(ATBF) has been highly successful in meeting this objective and
will continue lending until it is fully subscribed or, if earlier,
until 30 November 2009. So far the £9.99 million fund has
made offers of loan finance totalling £9.3 million to 55
businesses. Of these, 50 businesses have drawn down loans totalling
£8.2 million, safeguarding 3,156 jobs.
West Midlands Regional Minister, Ian Austin said:
"This is a really important announcement for businesses in the
West Midlands with viable business plans but who have been unable
to obtain the finance they need from mainstream sources.
"We were the first region to establish a loan fund to help
businesses hit by the credit crunch and financial crisis and we are
the only region extending lending in this way. These announcements
show companies that the government is on their side helping them
cope with the recession, working to help them stay in business and
safeguard jobs."
Richard Hutchins, Deputy Chief Executive and Corporate Director
for Economic Development at Advantage West Midlands,
said:
"The pilot fund (and the new fund which will follow later in the
year) is designed to meet the need of businesses for funds to help
them grow, rather than just survive, but who can't access
mainstream funding.
"This pilot fund will provide a vital source of finance for
regional businesses seeking to grow but held back by difficulties
in getting mainstream funding despite being viable and well
managed."