With businesses looking to realise their 2025 growth plans against a complex economic backdrop, community development finance institutions (CDFIs) are primed to offer support, says Stephen Deakin, CEO at BCRS Business Loans.
With 2025 now under way, companies will be looking to scale up, invest in new equipment or stay ahead by supporting staff with training and development.
There will also be directors ready to take up the opportunity of acquiring the business they run to take it to the next level.
Accessing finance can be challenging for businesses, with mainstream lenders working to tighter guidelines since the 2008 financial crash, which is where CDFIs are growing in importance.
The most recent annual figures showed there was a 14% jump to £287m lent by the UK’s not-for-profit, community development lenders in 2023, creating 6,571 jobs and 3,829 enterprises and saving people £29m in interest, the highest total lending in their 30 year history.
Analysis from Responsible Finance, which represents CDFIs, reveals they made 90,531 loans in 2023, of which 66% were to women and 11% to people who said they are from Black, Asian and other ethnic minority groups.
At Wolverhampton-based BCRS Business Loans, we work with a network of financial advisers to ensure this upward trend continues, in line with our goal of ensuring no viable business goes unsupported, especially as the economic outlook remains uncertain.
We keep a close eye on the mood within the local economy. The Lloyds Business Barometer for November showed confidence in the West Midlands rose 15 points to 51 per cent, bucking a three-point fall in confidence at a UK national level, and the second-strongest confidence reading of any UK region or nation in November after London (57%).
Meanwhile, the most recent Black Country Chamber of Commerce survey showed 60 per cent of the region’s businesses were predicting an improvement in turnover over the next 12 months, well above the latest national survey result but down from 71 per cent in Quarter 2.
With increased National Insurance levels for employers now on the horizon and inflation having risen in November, it is a challenging time for companies to make strategic decisions to harness the optimism still out there in the economy despite the pressures.
As not-for-profit lenders, CDFIs differ from traditional lenders; not only do we actively look to support firms which do not qualify for mainstream lending, we are able to take on board a host of information from the borrower to offer more flexibility on conditions including loan terms.
BCRS Business Loans is a story-based lender, which means we listen to businesses, understand their challenges and help them to write the next chapter of their story.
We want to help companies to succeed so we signpost companies to business advice and mentoring.
As we are rooted in the West Midlands, where all our teams live and work, we have an active interest in seeing the region’s economy thrive.
With the region having some of the most deprived areas in the UK, we are proud to provide positive support for geographical and social areas not traditionally helped, as well as helping them gain access to grants and other financial advice.
The image of not-for-profits as being streamlined and lightweight could not be further from the truth for CDFIs as we provide access to large funds.
At BCRS Business Loans we deliver investment on behalf of the £400 million Midlands Engine Investment Fund II from British Business Bank. We are delivering smaller loans from £25,000 to £100,000, with partners offering debt finance from £100,000 to £2 million and equity investment up to £5 million.
The most recent financial year saw BCRS Business Loans named as a fund manager for the £130m Investment Fund for Wales to increase the supply of smaller loans to Welsh businesses which might otherwise not receive investment.
And we are a delivery partner for the second Community Investment Enterprise Fund (CIEF), which has £62m to invest from Lloyds Bank, social impact investor Better Society Capital (BSC) and three participating CDFIs including BCRS Business Loans, Business Enterprise Fund and Finance for Enterprise.
Like everyone else, January means we are looking ahead. Our new year’s resolution for 2025 is to ensure BCRS Business Loans supports more businesses in more ways than ever before, stimulating growth and innovation in the 12 months ahead and beyond.