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Demand for micro loans more than doubles as businesses take advantage of new Welsh Government fund

Small businesses all over Wales are taking advantage of micro loans from Finance Wales. Demand for the loans of up to £25,000 has more than doubled in the 2012 -13 financial year compared to the previous financial year. 62 businesses have so far benefitted from micro loans totalling £844,000.

Business Minister Edwina Hart welcomed the news: “The Welsh Government established the Wales Micro-business Loan Fund in direct response to recommendations from the Micro-business task and finish group which emphasised that access to finance is a key barrier to growth. “I am pleased to see that a wide range of small businesses across Wales are now benefiting from the Fund and would urge others to follow suit and contact Finance Wales. Micro-businesses play a key role in the Welsh economy and this Fund means there is more finance available for them to invest in their businesses, grow and create jobs."

Micro loans are available from Finance Wales from the recently-launched £6 million Wales Micro-business Loan Fund as well as the European-backed £150 million Wales JEREMIE Fund.

“We’re particularly pleased to see demand for micro loans increasing so strongly. Micro loans have always been available from Finance Wales, but the Wales Micro-business Loan Fund allows us to lend to a much wider range of Welsh businesses, including those which sell goods or provide services to consumers,” explained Finance Wales’ New Investments Fund Manager, Mike Owen.

Welsh businesses benefitting from Finance Wales’ micro loans include:

  • Bryn Tanat Hall, a boutique hotel in Powys has used a £20,000 micro loan to install a new wood pellet boiler which will be cheaper to run.
  • A £25,000 micro loan has enabled Bridgend-based industrial electronic equipment repairer, Kontroltek to purchase new test rigs so that it can take on new contracts.
  • The new owners of Carmarthen’s Teifi Mania indoor play centre have combined a £25,000 micro loan with bank finance to create a special toddlers’ area.

“Micro loans can help with a range of investment needs, including start-up costs, capital expenditure and stock purchases. Businesses often use them to unlock much-needed additional investment. We also have a streamlined application process which ensures we can be responsive to businesses’ needs,” Owen continued.

Welsh social enterprises are also set to benefit from the Microbusiness Fund, with £1 million earmarked for micro loans to social enterprises. The Wales Council for Voluntary Action (WCVA) has been appointed to manage this element of the Fund on behalf of Finance Wales.

Graham Benfield, WCVA’s Chief Executive said: “The £1 million available will provide a real boost for social enterprises and provide them with much-needed finance to get their projects off the ground. It’s important that these organisations flourish throughout Wales because revenues and profits will always be reinvested back into supporting local services, people and communities.”

The Micro-business Loan Fund was a key recommendation of the independent Micro-business Task and Finish Group commissioned by the Welsh Government. IoD Regional Director, Robert Lloyd Griffiths chaired the Group.

He said: “Micro-businesses around Wales told us that access to finance is key to their future success. Both the Micro-business Loan and Wales SME Investment Funds have made significant amounts of new capital available to Welsh small and medium-sized businesses in the last year. I’m pleased that the Micro-business Loan Fund is already having a significant impact and I’d urge more micro-businesses to contact Finance Wales to discuss the options open to them.”

Businesses interested in applying for a micro loan should contact Finance Wales, while social enterprises should contact WCVA.