Sole trader fund launched by Hitachi Capital

HITACHI Capital Consumer Finance has launched a multi-million pound fund aimed at supporting sole traders in Yorkshire and beyond.

The Leeds-based finance specialist is expanding into asset-based loans and is initially making £25m available.

Hitachi Capital said the fund would fill a “real need” as recent figures have suggested that lending to the small business and sole trader sector shrunk by £2.4bn in the final quarter of 2012 and that the Government’s Funding for Lending scheme is not working. 

The new fund will provide asset loans from £2,500 to £15,000 and will be aimed at traders including plumbers, builders as well as independent cafes and bars to purchase equipment, vehicles and tools.

Gerald Grimes, managing director at Hitachi Capital, said: “It is the first time in our 30 year history of providing billions in consumer finance that we have entered the trade loan sector.

“It is extremely disappointing that some of the banks have accessed £13.8bn pounds of cheap Funding for Lending Scheme finance and failed to pass this onto hard working professionals who are the engine room of the economy. The scheme aims to boost the flow of loans and at the moment, it is not living up to expectations.”

Mr Grimes said he believed one of the key issues with accessing loans for traders was the complexity of the credit approval process.

He said Hitachi Capital’s fund used a simple online application process.