November 16, 2012 - Rachel Miller
Lancashire County Council has teamed up with the crowd-funding website Funding Circle to launch the Local Business Lending Partnership.
The partnership is a pioneering scheme designed to stimulate local economic growth and employment through improved access to business finance. The pilot scheme could become a blueprint for small business lending in the public sector as a whole.
As part of the partnership, the council will lend an initial £100,000 to Lancashire-based businesses using Funding Circle, the online marketplace where people directly lend to small businesses. It is anticipated that the partnership could grow to a multi-million pound commitment over the next five years.
James Meekings, co-founder of Funding Circle, said: "This revolutionary partnership will deliver much-needed finance to growing businesses in Lancashire, in turn creating jobs and boosting the local economy. Lancashire County Council is leading the way for other local authorities to follow, injecting finance right into the heart of the local business community."
County councillor Michael Green said: "This is a ground-breaking way to fund business growth and a first for any council in the UK. There is great potential to grow the Lancashire economy in the future. Working with Funding Circle, our aim is to unlock more of this potential."
Lancashire's 52,000 small businesses are responsible for more than 50% of local private sector employment. However, according to figures from the British Bankers Association (BBA), loan facilities in the region fell by 30% between Q1 and Q2 in 2012.
A recent study by Funding Circle found that 42% of small businesses in the North West said they would increase staff numbers if they could obtain finance.