Micro business loan fund reaches £10 million investment milestone

A micro business loan fund managed by Finance Wales has invested more than £10 million in 390 Welsh startups and established businesses over the past five years.

The Wales Micro Business Loan Fund, which launched in 2012, has helped to create over 2000 jobs across Wales and has increased from £6 million to £18 million during that time.

It’s supported businesses in a range of industries, from technology to retail. Bibi Shoes, which sells designer shoes both online and in-store, secured £25,000 from the scheme.

Responding to a report by the Micro-Business Task and Finish Group, the scheme has transformed the way SMEs access finance in Wales. The Wales Council for Voluntary Action (WCVA) now manages part of £1 million of the fund to support social enterprises.

The fund has become more technologically advanced in recent times too. A new online fast track process was established in January 2017, offering a streamlined two-day application process for £1,000 – £10,000 micro loans.

Economy Secretary Ken Skates said: “The Welsh Government is proud to support the Wales Micro Business Loan Fund and has trebled its investment in the fund from £6m to £18m.

“The fund was established to assist companies with less than 10 employees to  access the funding they need to get their businesses off the ground and prosper and grow.

“It was developed to fill a recognised gap in the market and five years in it is great to see the impact it  is having  on businesses and social enterprises the length and breadth of Wales.”

As the Wales Micro Business Loan Fund celebrates five years of supporting Welsh businesses, IoD Wales director Robert Lloyd Griffiths said access to finance is a key priority for Welsh business owners.

He said: “Finance Wales is listening to the needs of the business community; backing small businesses in Wales with access to finance that is simple and quick.

“The feedback I have had from businesses who have accessed the fund tells me that it has made a big difference to their growth and sustainability.

“I am particularly pleased to see such geographical and sector diversity in terms of the numbers of businesses helped by Finance Wales over the last five years.

“The micro-business sector represents some 97% of the Welsh economy; a can-do approach to funding is therefore a vital, dynamic and integral part of our economic success.”

Nicola Edwards, micro loans fund manager at Finance Wales, said: “We exist to help small businesses thrive. From the purchase of stock and new equipment, new premises or acquisitions, we have helped hundreds of Welsh businesses over the last five years to fulfill their potential.

“With dedicated portfolio managers and regional offices around Wales, we have an open
minded and commercial approach to investment that is very much tailored to meet the needs of business.

“In fact, it is this approach that resulted in the development of our fast track process and an increase in the application threshold from £5,000 to £10,000. We’ve seen a direct increase in take-up as a result which is very pleasing.

She added: “Quick, local decision making is critical to our success with many clients really valuing the collaborative approach that we have when working with other Government bodies, lenders and advisors like Business Wales and the Federation of Small Businesses.”

Image credit: Tax Credits