London Objective 2 Access to Finance Programme
European Funding Support for Small Business Finance
Approximately £16m has been allocated from the London Objective 2 Programme to improve access to finance for Small and Medium-sized Enterprises (SMEs) and start-ups in the Objective 2 area. This funding will act as leverage for at least a further £21m from the private and public sectors, and facilitates the implementation of the Access to Finance Programme.
The aim and objectives
In 2001, the London European Programmes
Committee approved a strategy for the Access to Finance Programme,
which aims to improve the ability of SMEs in the Objective 2 area
to access finance. The strategy identified three key objectives
(strands):
- Strand 1- improving the financing propositions for SMEs;
- Strand 2 - providing effective marketing, information and communicating the sources of appropriate finance; and
- Strand 3 - improving the Supply of Finance.
Implementing the Strategy
Business Link for London is responsible for co-ordinating the delivery of activities under this strand; however, implementation is being carried out mainly by enterprise agencies, accountants and other financial intermediaries. Specialist advisers support the Access to Finance Programme by developing and maintaining on-going relationships with intermediaries and businesses. They also work with finance providers in order to understand their funding criteria and build up their confidence in the proposals arising from the programme. Enterprise agencies, accountants and other financial intermediaries wishing to get involve with the Programme click here.
Business Link for London is also responsible for implementing the activities under this strand. The main thrust of this strand involves working with banks, accountants and other intermediaries, including public and private sector partners, to deliver timely and relevant information to SMEs and start-ups in the Objective 2 area. A marketing manager will be responsible for promoting the programme to SMEs and intermediaries.
The London Development Agency is responsible for implementing the proposals under strand three, which involves the creation of a loan fund and two equity funds – a seed corn fund for high technology companies and a early-stage fund for the creative industry. Experienced fund managers have been contracted to deliver the loan fund. Applicant and business support agency should contact the fund managers for information on applying for a loan. Financial Service Authority (FSA) authorised fund managers will be appointed by open tender for the equity funds and will be responsible for raising the commercial finance for the equity fund. Details of fund managers will be posted as soon as they are available.
Who is it for?
The Programme is available to SMEs or start-ups located in the London Objective 2 area who are seeking to raise finance for their businesses. SMEs or start-ups wishing to access the service being provided under strands 1 and 2 must contact the Business Link for London on 0845 6000 787 and quote 'Access to Finance or visit their website.
The funds under strand 3 may invest only in SMEs or start-ups and only in activities which the fund manager(s) judge to be economically viable. Organisations in difficulty as defined by the 'Community guidelines on State aid for rescuing and restructuring firms in difficulty' are excluded from investment under this scheme.
The loan fund was launched in November 2004 by Stephen Timms, Financial Secretary to the Treasury. For more information click here.
The equity funds are expected to be operational by spring 2005.
Contact
Kenroy Reid
Access to Finance Programme Manager
kreid.gol@go-regions.gov.uk
020 7217 3004
