Coventry City Council has approved plans for a new loan Fund, which will be used to support businesses in Coventry.
The Duplex Fund, as it will be known, which was approved by Cabinet on 7 March, will mean that Coventry City Council can offer a mix of grant and loan funding to small and medium sized local businesses.
Businesses will be able apply for small loan to support their growth and to protect and create jobs in the city. However, the fund will offer much more than a traditional loan; an injection of grant alongside the loan which will greatly reduce the overall borrowing cost to businesses – making the loan interest free in some cases.
Councillor Jim O’Boyle, Cabinet Member for Jobs and Regeneration, said: “I expect this new fund, which will mean we can offer loans of up to £50,000 to be really popular. It can be tough for small businesses to access affordable finance but this will make it really simple and really cheap.
“We’ve been clear that we want to help businesses of all shapes and sizes to grow and take on more staff. And this fund backs up our commitment to support jobs, regeneration and economic growth to the city.”
The Duplex Fund proposal will recycle funds it receives in loan repayments to allow the scheme to “revolve” for a total of ten years, with a further four years for the final set of loans to be repaid by those that have taken out the loans. The fund will enhance and complement the existing range of access to finance schemes available for businesses in the local area, including the Coventry & Warwickshire ERDF investment fund and Warwickshire County Council’s existing £2m programme of small business loans and grants.
Councillor John Mutton, Cabinet Member for Strategic Finance and Resources, said:
“This will be a fantastic scheme and we anticipate we could support over 360 businesses, create 1,400 jobs and provide £20million in financial assistance to businesses in the area.
“It's help like this that could be the difference between local companies growing or folding – it’s that important. And the clever bit is that we can make the same amount of money last longer and work for more companies by matching grant with loan options.”