Two West Midland companies are among the early beneficiaries of more than £700 million worth of funding from the European Investment Bank.
Redditch specialist vehicle firm Fly By Nite has been loaned £450,000 and Staffordshire manufacturer Alpha Engineering has received £300,000 from the EIB as part of a Government initiative which has seen almost 3,000 UK businesses helped.
At the 2008 Pre-Budget Report the Government announced that small and medium sized enterprises could benefit from up to £4 billion of EIB finance between 2008 and 2011 through intermediating national banks, which then lend the finance on a matched funds basis.
In the first year the target was for UK banks to secure £1 billion of finance for SMEs from the EIB. This was achieved, with banks having now secured a total of £1.39 billion from the EIB.
Sharon Reed, director of Fly By Nite, said the cash had already been invested into the business.
She added: “In order to expand our business we approached our bank for finance to enable us to purchase six new articulated trucks.
“With help from the European Investment Bank, we received a very competitive rate of interest by way of a cash lump sum, which also helped our cash flow. We would recommend this type of funding to any business as it is extremely straight forward to arrange.”
Brian Purves, director of Alpha Engineering, said the finance arranged through the Government scheme would allow the company to invest in premises.
The initiative is designed to help ensure well managed small businesses in the UK are supported to help the country drag itself out of the dreary economic conditions.
Mr Purves said: “Alongside other investments we managed to secure the asset base of our company by taking out a loan to buy the freehold of our premises – which we previously rented.
“The availability of EIB finance enabled us to access this funding at a reduced cost, and allowed us to take advantage of an opportunity in the market to contribute to the continued global growth of the company.”
The economic secretary to the treasury, Dudley South MP Ian Pearson, urged businesses in need of funding to get in touch with their local banks.
He added: “Support for SMEs is key to driving growth in the UK, so I am delighted that small businesses are benefiting from this finance. This forms part of the Government’s continued commitment to help SMEs access the finance they need to take their businesses forward, which is vital to our long-term growth strategy.
John Wright, chairman of the Federation of Small Businesses (FSB), said: “The FSB welcomes the news that nearly 3,000 SMEs have benefited from low cost EIB loans.
“We continue to urge non-participating banks to enter the scheme to make the loans available to more SME clients,” he added.
“Tracking research by the FSB shows that credit conditions for SMEs continue to stabilise, with more requests for credit being accepted.
“Further promotion of EIB loans will continue to help the smallest companies through the recovery.”