Despite the Government’s much-vaunted Funding for Lending scheme, business lending slumped in the latter part of 2013, according to Bank of England data. Our recovery is being driven by the consumer sector and the Bank of England says that the credit supply to businesses remains ‘relatively subdued’.
Small and medium-sized businesses feel the lack of lending most, because while the cost of credit is falling, higher fees can offset this, an unforeseen outcome of the Funding for Lending scheme. (Funding for Lending, launched in July 2012, allows banks and building societies to borrow from the Bank of England at cheaper than market rates for up to four years, enabling them to increase their lending to businesses by lowering interest rates and increasing access to credit.)
If SME’s are having a difficult time securing finance, is there any hope for the thousands of would-be micro-businesses across the Cotswolds who may have been turned down for a bank loan and don’t know where to turn? Well there might be. Let us introduce you to Fredericks Foundation.
The Foundation was set up in 2001 by a successful entrepreneur, Paul Barry-Walsh who wanted to help those seeking to set up and run their own business but can’t get bank finance or other support.
Fredericks Foundation is now on its way to being a national charity, with 18 different funds covering around 26 million of the population but it has deep roots in the Cotswolds. It lends up to £10,000 for new businesses or up to £20,000 for businesses with a track record and the interest paid by the businesses funded goes back into the funding pot. However, more money is needed and local contributors include Cheltenham-based Business Angel Syndicate Angels4Angels and Stroud District Council, which has provided funds every year since 2003. In Oxfordshire the Local Enterprise Partnership contributes through funding a client manager, and the Foundation regularly bids for Government money. Anyone can invest, and for those doing so through the little-known Community Investment Tax Relief Scheme, the tax relief is worth up to 25% of the value of the investment in the CDFI. The relief is spread over five years.
John Caines, Director, Angels4Angels said: “We are delighted to be supporting Fredericks Foundation. In addition to the clear benefits for the recipients of financial funding, the businesses backed are improving the UK’s economy to the benefit of everyone in our society.”
Of course, such charitable organisations are not the only ones filling the void left by the larger lending institutions who don’t want to lend to the riskier small businesses, crowdfunding and peer-to-peer funding are also growing in popularity. However, the beauty of Fredericks Foundation is that it offers business support too.
Fredericks Foundation in Oxfordshire is chaired by Audrey Slade, previously Director, Business, Jobs & International at the London Development Agency and before that an Executive Vice President at the New York City Economic Development Corporation, where she directed New York City’s efforts to attract and retain businesses. Keith Rog, formerly Head of Marketing and Development at GFirst, Gloucestershire Local Enterprise Partnership, chairs Fredericks Gloucestershire. Alongside are a small army of volunteers who give their time and expertise to support the small businesses, and Fredericks Foundation always welcomes more.
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Jayne Ozanne, 45, has been appointed as the client manager for Oxfordshire’s Fredericks Foundation. After a raft of roles at Proctor and Gamble, Kimberly Clark and the BBC, Jayne then moved into the charity sector and was most recently a director at Tony Blair’s Faith Foundation. She says that Fredericks Foundation allows her to get involved in the local delivery of a charity that is making a difference to people’s livelihoods. She also has her own start-up business, Generosity, aimed at philanthropists.
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SUCCESS STORIES
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Oli Ward, Fit for Purpose
When Oli was 15 years old he weighed 11 stone. Six years later he weighs exactly the same: this once overweight young man uses his superb fitness and health as a key skill in his new business, Oxford Circus Academy
Schooled in theatre and performing arts to degree level, Oli lives to perform and encourage others to do so. He’s a dancer, acrobat, actor, stunt performer, free runner and hand balancer. He’s even competed in the World Skipping Rope Championships. Oli saw a gap in the circus skills market in and around Oxford and hasn’t looked back. His philosophy is to help people have fun, enabling them to enjoy a sense of fulfillment and increased self-confidence, and become fit in the process.
Currently offering classes in three locations around Oxford, Oli has started to run small group lessons for different levels of ability. A key element of Oxford Circus Academy is to offer circus skills to encourage clients to make a hobby of developing their skills to ever higher standards. This is why a good proportion of the loan Fredericks gave him was, unusually, for the development of his own professional skills. The rest was for specialist equipment.
Of his experience with Fredericks Oli says he was treated professionally and was glad that it was a total support package not just a financial loan.
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Monica Franke invests in her community
Health and wellbeing have always been part of Monica Franke’s life. Her father was a pharmacist, her mother a nurse and she has a degree in osteopathy and a career in osteopathy, sporting performance and Pilates. She now works out of Clinic on the Green in Bletchingdon. She speaks with conviction about her business not just as a commercial operation but also as a contribution to her community. Rejected for a loan by HSBC in 2012 because she hadn’t been with them for long enough, she says that Fredericks was very clear about what they expected from her and what she could expect from them; this was important as it gave her a deal of confidence during the loan panel (Dragons Den) stage of her application.
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A clean start for Praveena
Praveena Lalli could find herself not only the owner of Gloucester’s smartest launderette, but also presiding over a brand new local social network. Eight months on and it’s going even better than she expected. The Laundry Lounge at 52 Bristol Road is no ordinary launderette. Along with the washers and driers, it’s got comfy leather sofas, free wifi and a TV. Her letter to the Fredericks’ Foundation Panel tells her story better than we can.
“To everyone on the panel that I met yesterday from Fredrick’s Foundation. Thank you for taking the time to meet me and discuss The Laundry Lounge and funding. I was overwhelmed by your positivity and enthusiasm for The Laundry Lounge. I have complete faith that I can make it a success but to see others have the same faith in me was truly inspiring. I loved your comments and new ideas and things that I might need to change. I’ve taken it on board and will be doing this.
Yesterday for me was a monumental day and one I’m never going to forget in my lifetime. I went to bed with a huge smile on my face.
If any of you ever pass by Bristol Road or need laundry doing, please visit me. It’s because of you and my parents that my dream has now turned into reality! The sky’s the limit!”
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Fredericks Foundation – are you eligible?
Fredericks Foundation provides a comprehensive range of business support and microloan funding both for start-ups and established small businesses in Gloucestershire and Oxfordshire. It exists for people who cannot access finance through the usual channels.
Fredericks Foundation will consider anyone for a loan and business support if they can demonstrate they have made a genuine application for funds to their bank or a mainstream lender, and been turned down.
If you are starting a new business or have been trading for 12 months or less, you may be eligible for a loan under the government Start Up Loan scheme.
You may require start-up money; capital to expand or funds to bridge a gap. Whether you are a sole trader, in a partnership or have a limited company you may be eligible for a loan.
For start-up businesses Fredericks Foundation offers up to a £10,000, for established businesses with a financial track record, the maximum loan is £20,000, however, the average loan is less than £5,000.
