£20m for finance provider to support 280 businesses and create 600 jobs
The Bradford-based Business Enterprise Fund (BEF) has received a facility of £20m to boost support for small businesses, via an investment from Lloyds Bank & Big Society Capital.
In a bid to support local jobs and improve the economy, the investment is part of a £62m boost to help Community Development Finance Institutions (CDFIs) back businesses in the most deprived areas of England and Wales.
The investment into CDFIs from a mainstream bank also marks a first in recent years.
BEF, which operates across Yorkshire and the Humber, the North East and the North West, is one of three CDFIs selected to receive the funding, with criteria ensuring the money goes towards socially motivated lenders who are already lending around £100m per year to businesses which traditional and challenger banks or fintech can’t service.
The fund is designed to support underserved communities including black and minority ethnic and female led businesses.
BEF, which marks 20 years of lending in 2024, specialises in providing flexible finance to businesses in these communities.
Stephen Waud, CEO of BEF, said: “It’s good news that mainstream lenders such as Lloyds Bank recognise the transformative effects that CDFIs have in the communities they serve.
“It’s all about providing business owners, and aspiring business owners, with the opportunity to go to market with their ideas.
“There’s also a real focus on trickle up, rather than trickle-down economics, where job creation and wealth generation in these communities create proven economic change.
“We plan to support over 280 businesses and create nearly 600 jobs with the funds that we have, helping both female and BAME led businesses with the opportunity to prove their success.”
The latest money, which follows on from a successful first phase of funding, will continue to be managed by Social Investment Scotland (SIS), which has been investing in the social sector since 2001 and is itself a CDFI.
Elyn Corfield, CEO Business and Commercial Banking, Lloyds Bank, said: “Small and medium size enterprises are the heartbeat of the UK economy and as the largest domestic banking group, we have a proud history of supporting UK businesses to thrive.
“We’re therefore happy to support the CDFI sector to back local businesses, with a focus on deprived areas, and ensure they have access to a range of financial options right for them.”
Theodora Hadjimichael, CEO of Responsible Finance which represents the UK’s CDFIs, said: “Wherever they live, entrepreneurs need the right finance at the right time to develop their businesses.
“Yet many viable businesses based outside London or led by people from an ethnic minority background or by women, struggle to access the finance they need to grow.
“Lending from the UK’s CDFIs is meeting this gap, creating thousands of thriving businesses and banks’ future customers.
“We are thrilled to welcome Lloyds Bank’s commitment to our sector and the small businesses we serve, alongside BSC’s valued longstanding support. As we announce this historic investment, we urge other mainstream banks to join Lloyds.”
