Posted on 12th February 2008
An extension to the Government’s Small Firm’s Loan Guarantee (SFLG) scheme has opened the door for more investment in low socio-economic areas by community development finance institutions (CDFIs).
Three new CDFIs, the South West Investment Group, Foundation East and the Bradford Enterprise Agency, will now be using the important scheme to increase access to finance for small businesses.
They are now approved lenders, which enables lending to small businesses where the borrower is unable to provide security, as the Government provides a 75% guarantee to the lender.
According to the Community Development Finance Association (CDFA) this will allow young businesses, which are often in the greatest need of assistance, to access finance. CDFIs work to benefit businesses in disadvantaged communities and SFLG will help them create jobs and services where they are most needed.
A change to Community Investment Tax Relief (CITR), which provides incentives for individuals and businesses to invest in CDFIs, has also been announced by the Department for Business, Enterprise and Regulatory Reform. The implementation of recommendations from a recent operational review aims to make CITR more practical, clear, and useable.
