A credit union now plans to help small businesses.
The East Sussex Credit Union is opening its doors to corporate members for the first time and pledges to offer a lending lifeline to local small businesses. In the past the Union restricted savings and loans to individuals. But organisers now believe the time is right to provide much-needed help to the local business community.
Richard Priestman, President of East Sussex Credit Union said, “Over the years we have seen a steady stream of applications from local businesses unable to access small loans from mainstream lenders but until now have not had a product to offer. With our new initiative we hope not only to attract corporate members interested in borrowing from us but also those wanting to deposit funds too.”
The Bank of England says lending to small firms slumped by £700 million in the first quarter of the year as banks shied away from business loans while they rebuilt their balance sheets. The Government has accordingly been encouraging firms to turn to alternative finance sources and East Sussex Credit Union sees this as a chance to help support the region’s small businesses.
Richard Priestman went on, “Three quarters of businesses in East Sussex employ fewer than five people and many need a small amount of credit to keep wheels turning or take a step up. Most lenders are not interested in this level, meaning there is a great opportunity for an ethical lender like us. We want to put our toe in the water and are therefore keen to hear from firms who feel that we might be able to help.”
The Union will lend up to £15,000 to corporate members. Annual rates of interest start at just 10.5 per cent.