At a time when finance for small commercial property businesses is almost non-existent, a new loan fund in London has opened for business, focusing on assisting people struggling to find work to help themselves by setting up in business.
Established in 2001, Fredericks Foundation is a leading microfinance organisation in the UK. The organisation provides funding to commercial property businesses at all stages, from start-ups to existing commercial property companies.
The Foundation will be working in collaboration with The London Community Foundation in a project that will see small loans extended to start-ups and small commercial property businesses unable to access conventional lending on the high street.
Mayor of London Boris Johnson supports this much needed lending that is coming to some of the most run-down parts of the UK. He stated: “London has tremendous entrepreneurial spirit, but it’s difficult for start-ups to get access to the help they need to get up and running.
“Small businesses are the backbone of London’s economy and with this new initiative, Fredericks will provide much-needed support to inspiring Londoners who want to start their own businesses, drive economic growth and create jobs.”
The average loan is less than £5,000 and as well as money, borrowers also receive a package of support and mentoring to make sure each commercial property business has the highest chance of success, as well as taking many receivers off benefits and back into the tax-paying community. A report written by the Centre for Economic and Social Inclusion, has found that for each £1 lent by Fredericks, a minimum of £3 of public money is saved.
Fredericks Foundation has been lending in this way for over a decade, and has generated or protected over 1200 jobs while lending over £3 million. With Fredericks at present operating from Kent to Devon, the recent addition of Regional Growth Fund assistance will facilitate ten new local lending “Hubs” to open in conjunction with different Community Foundations across the country. And while Fredericks controls the lending, each local Hub will recruit local businesspeople and supporters to raise the running cost and make the decisions with regards to lending, with the advantage of local knowledge, contacts and instinct.
The Fredericks Foundation has loaned to a wide range of commercial property businesses, from Go Easy Petcare, a dog walking business, to Janet Edwards London, a florist. The organisation has also given a loan of £15,000 to The People’s Supermarket to help with reformation and allow it to continue serving the local economy.
Founder of Fredericks Foundation, Paul Barry-Walsh added: “From the outset, we have believed at Fredericks that giving people a hand-up when they despair of working and providing for their families is a great way of ensuring a healthy local economy.
“We know it works. Our success rate for start-ups still trading after three years is over 70 per cent – a figure most banks would be proud to boast. And we know from the real stories we’ve been part of since 2001 that there’s a genuine need for someone to take a chance on people who have the vision and commitment to make a success of their businesses, but just need the backing of someone who believes in them.”
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