Development Bank of Wales reports increase in micro-loan finance activity

To date, some 73 small businesses in Wales have accessed more than £1.3m in accelerated micro-loans from the Development Bank of Wales in its current financial year.

The figure of £1.32million, from Wlaes Development Bank, represents an increase of more than 30% on the same period in 2020, when accelerated loans amounted to £986,000.

Funding figures are based on the period from April to December last year, which falls within the development bank’s current fiscal year to the end of March 2022.

The development bank said it showed small businesses have an appetite for growth capital to invest as the economy recovers from the pandemic.

The £30m Wales Micro Loan Fund is funded by the Welsh Government. Loans between £1,000 and £50,000 are available with repayment terms of between one and ten years.

The scheme is open to small businesses, sole traders and social enterprises that have been operating in Wales for more than two years. They can apply for a fast-track micro loan of up to £25,000 from the Development Bank of Wales. Decisions on eligible customer loans can be made within two business days.

Beneficiaries of the accelerated loans include an 18th century inn, a Spanish tapas bar and an African food store.

Nicola Edwards, microloan fund manager at Development Bank of Wales, said: “Now more than ever, businesses need quick and easy access to sustainable and flexible finance to help them invest. in the future. Those in the restaurant and hotel industry have had a particularly difficult time over the past two years as many traders seek funding to help them recover and grow.

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She added: “It’s a testament to the dedication and future ambition of business owners across all sectors in Wales that so many have come forward to get the funding they need to invest in their businesses, develop and accelerate growth.”

Cutting Edge Mechanics, based in Carmarthen, has received an accelerated loan of £25,000 to take advantage of new dealership opportunities with the purchase of stock and a trailer. Founded in 2016 by owner Alun James, the company is an independent dealer and repairer of specialist arboriculture and gardening equipment.

Mr James said: “The opportunity arose to take charge of a new dealership. £25,000 is a lot of money to come up with as a small business, so getting a quick decision on a Development Bank loan was just what we needed. It was a simple and straightforward process, which meant that I could place the order with the dealers and quickly agree on the purchase of a new trailer. »

Ele’s Little Kitchen, a Spanish catering company based in Gorseinon, was first set up from home to host parties, business events and weddings.

An accelerated loan of £8,000 has enabled owner Elena Pardo to move into new restaurant premises on High Street, Gorseinon. The popular tapas bar now offers take-out and delivery.

African food store SunBim Foods in Newport is now making African baked goods on site after securing a £12,000 fast-track loan which was used to buy an industrial oven.

Owner Sunday Omuju said: “Access to finance was very important to us as we couldn’t invest in the business without development bank support. We are also very grateful for making the application process so easy and quick. It made a huge difference.

Tafarn Y Waen, an 18th century inn near St Asaph, received a £20,000 loan which was used to diversify income by renovating the secluded pub into a boutique guest house. A small caravan site has also been created.

Co-owner Elaine Molloy said the business would never have survived the past 18 months, let alone future growth, without the loan.

“The money allowed us to diversify and sustain the business by investing in our homes. We have created an attractive destination that will ensure the long-term survival of Tafarn y Waen as a historic rural settlement.