In this interview, Made in the Midlands sat down with Wolverhampton-based BCRS Business Loans to discuss how manufacturers like yourselves can access alternative sources of finance when traditional sources are unable to help.
Business loans offer flexible ways for manufacturers across the region to access funding.
One of the first questions that Made in the Midlands asked BCRS Business Loans is what manufacturers are seeking additional funding for. Their answer? They believe manufacturers are sourcing finance to “employ additional staff, invest in new equipment or machinery, purchase additional stock or raw materials, research and development, amongst other things such as website development and marketing.”
Dating back to 2002, BCRS Business Loans was originally set up by the local Co-operative Development Agency, on a non-profit distributing basis, to support local businesses that were unable to access finance from what we would consider traditional lenders.
Fast-forward to 2019 and the company says it is a relationship-based lender, offering loans ranging from £10,000 to £150,000 over a period of one to seven years, with the perk of no early repayment fees.
We began by asking why the company wants to focus on Manufacturing. BCRS responded by saying: “We want West Midlands based manufacturers to know that BCRS Business Loans is here to support them. All too often businesses aren’t aware of the alternative funding that is available to them.”
This approach has seen great success. At the end of the last financial year in March 2019, BCRS Business Loans announced that it had experienced its best-ever year of lending, with a record £7.2 million being delivered to over 153 SME businesses - averaging £47,058 per business.
As a lender of social impact, one of the key lending criteria is job creation and safeguarding. To date, this has resulted in BCRS Business Loans helping to create or safeguard over 10,000 jobs.
Furthermore, by investing in SMEs, it has been calculated that BCRS Business Loans has helped to generate an additional £262 million in the West Midlands regional economy since 2002*.
Yet, in a time where it has been suggested that the UK economy is slumping into stagnation, BCRS Business Loans has seen continued support for its objectives after securing investment from a number of different initiatives.
In 2017 itself, BCRS Business Loans was announced by the Midlands Engine Investment Fund (MEIF) as a fund manager for its £17million Small Business Loan Fund. Then, in the following year, 2018, BCRS secured a further £7.5million from the Community Investment Enterprise Facility (CIEF).
In this case, the CIEF – established by Big Society Capital and managed by Social Investment Scotland to support West Midlands based businesses, social enterprises and charities – saw Triodos Bank UK, a Bristol-based sustainable bank, agree to provide match-funding to create a total fund of £15million.
When asked why SMEs tend to find it difficult to secure finance from traditional lenders, BCRS Business Loans said: “SMEs, including manufacturers, are finding it increasingly difficult to secure finance from traditional lenders such as banks. Something that’s often down to credit criteria getting tighter and more problematic to meet.
Asked about how this issue plays into BCRS’s business model, it was explained that they’re not here to replace banks but can step in when banks are unable to help.
“We always suggest that businesses approach their bank for funding in the first instance. If their bank is unable to help, that’s when alternative funders such as BCRS Business Loans can step in to provide them with the finance they need to make their growth objectives a reality.”
Wrapping up our conversation, we asked BCRS how manufacturers should approach investment right now. With two delays, and a general election - at the time of writing - being encountered in just 2019, we asked them what their counter-argument would be to those who say that right here, right now the more prudent course of action for manufacturers would be to hold off on investment.
“We believe that businesses need to continue to invest in growth and development, which is the attitude that we are experiencing when speaking to local businesses. We can’t standstill.
“Although the uncertainty surrounding the UK’s Brexit arrangement continues, businesses are leading the way by setting growth objectives and being prepared for any eventuality. The key for us is that businesses are making strong contingency plans, especially if they currently trade with countries in the EU, so they can continue to export their products in any eventuality.”
But reading this, as a manufacturer in the West Midlands, what can BCRS do for you? If you are a West Midlands based business looking for a loan between £10,000 and £150,000, visit www.bcrs.org.uk where you can discover more about BCRS Business Loans and submit an online initial application form.
Furthermore, BCRS Business Loans recently created a list of top tips so loan applicants can ensure their loan application is as good as it can be, which can be viewed here: https://bcrs.org.uk/tonys-top-tips-for-a-speedy-loan-process/
*BCRS Business Loans’ economic impact statistics are calculated using the Responsible Finance Economic Impact Calculator. The calculator was originally prepared by the Centre for Business in Society (CBIS), Coventry University with assistance from James Medhurst, ICF International, with the support of Citi. It was updated in 2019 following a review by Marc Cowling, Brighton Business School, Richard Roberts, Aston University and Steve Walker, Aston Reinvestment Trust (ART).