Business and Industry Today is proud to announce that ART Business Loans has been selected as our Small Business Loans Company of the Month, for their outstanding dedication to providing financial support to small businesses across all sectors.
Based at Innovation Campus in Aston, Birmingham, ART Business Loans was established in 1997 in response to one of the recommendations from the Aston Commission, which was investigating the issues around access to finance in the area at the time. Led by Sir Adrian Cadbury, it was set up by a team which included the Chief Executive from the launch. Dr Steve Walker, and was created as a community benefit society owned by its members on a one member one vote principle. As a social enterprise, its main role is to provide access to appropriate finance for small businesses throughout the West Midlands that have been unable to obtain their full needs from the banks, addressing the lending gap left by high street lenders. As an additional source of finance, it ensures that they are not competing with banks for the provision of financial support.
Pioneers in their field, their model – raising finance from member investors from the public and private sectors, as well as individuals, to lend to businesses in a specific area – has now been replicated around the UK. Since their formation, ART Business Loans has lent over £25 million to more than 1,300 borrowers, enabling them to create or protect more than 7,250 jobs. Indeed, as the Chief Executive, Steve Walker, tells us, “Out of little acorns, big things can grow”, and their website displays a whole host of successful businesses who have managed to expand with the help of ART Business Loans. They are funded by corporate and individual investments, which provide a base from which they can attract additional funds from a variety of public and private sector sources, including banks. These investors are philanthropic companies and individuals who are primarily interested in social and economic impact, rather than the financial aspects. Currently, they have money from the Regional Growth Fund (RGF), provided through their trade association Responsible Finance, which is matched by funding from the Unity Trust bank.
ART Business Loan’s main mission is to provide the right finance for small and viable businesses, helping people access the most appropriate financial support as well as signposting people to independent Business Finance specialists for advice if needed. Steve chatted to us and explained the company’s key philosophy, “What sets us apart is that as well as supporting local businesses, we are also looking to create jobs. We’re concerned with the social impact of the things we invest in. Any surpluses made are reinvested in providing more loans to borrowers.” Indeed, their main clients are those who are traditionally deprived of opportunities, such as businesses who are geographically in areas of disadvantage, or those led by Black, Asian and Minority Ethnic (BAME) people, women or disabled individuals. In fact, these clients make up 75% of the businesses they lend to.
The loans can be used for any business purpose, including asset purchase or working capital, and businesses can borrow up to £150,000. This can be as either a single loan, or as part of a package alongside banks and other financiers, and these finance packages are becoming increasingly common as the solution to a business’ financial needs. The application process is straightforward: all a client needs is a viable business plan and a realistic schedule for repaying the loan. In fact, many borrowers come back over the years for further loans and to take advantage of being able to repay the loans early with no penalty.
The company takes a personal and straightforward approach to assessing applications, and aim to make the process easy, efficient and stress-free. It is focused on understanding the client’s business and assessing whether they can help, and if they can’t they will try to guide people to someone who can. The application form is available online, and can be either printed out or completed as a word document, and once all the information is submitted, they aim to complete the process within 21 working days.
ART Business Loans are now in a position where they lend £2.5 million per year, but they believe they have the capacity to do more. That is why in January 2019 they launched a Community Share Offer on Ethex, a social investment platform, in order to raise new capital to lend. They already have £2.5 million ready to loan this year. ART Business Loans is supported by Birmingham City Council and runs the Birmingham Small Business Loan Fund, which is a three year fund and lends £1 million a year, for Birmingham based businesses only. They then have £1.5 million of their own money to invest in the whole of the West Midlands in any sector.
The company are hoping that the Community Share Offer will provide the opportunity to raise £500,000 in shares, which can be used to lever more bank borrowing and ultimately increase their lending capacity to £4 million. If successful, they will be creating a model which is sustainable for the future. They also hope that it will increase people’s awareness of the company, meaning potential customers will avoid misinformation or the risk of approaching companies who will not have the same ethos, or provide the same level of support as ART Business Loans.
If you would like to find out more information about the services ART Business Loans provides, head to their website or use the contact details below.
Further information about ART’s Community Share Offer can be found at: www.ethex.org.uk/ART2019