Combined authority is first to offer Bounce Back loans with £10m package
Greater Manchester Combined Authority has pledged £10m emergency funding to support businesses based in the region and unable to access the Bounce Back Loan Scheme (BBLS).
The move, in partnership with GC Business Finance, is in response to gaps in Bounce Back loan availability for some Greater Manchester-based SMEs following the second national lockdown, and makes it the first UK combined authority to offer such assistance.
GC Business Finance will be looking to support those businesses not already banking with existing Bounce Back Loan providers, and applications from Greater Manchester businesses are welcomed from today (November 16) through an online application with applications closing once the fund is fully committed.
The limited £10m fund will be delivered by GC Business Finance (GCBF), part of the Growth Company, the UK’s only non-profit government-backed loans provider accredited by the British Business Bank under the Bounce Back Loans Scheme.
GCBF delivery will be through cutting-edge digital technology, offering top class customer service, quick decisions and integrated businesses support as part of the wider Growth Company offer.
The funding pledged by GMCA follows recognition of the gap emerging in the market for those local businesses who are dependent on a Bounce Back loan to continue to survive and grow, despite the pandemic.
GMCA’s vision to create a thriving economy in all parts of Greater Manchester and generate jobs with opportunities to grow and develop is dependent on local business infrastructure to make this vision a reality, a driving force behind their sense of responsibility and decision to make this pledge.
The approach by Greater Manchester allows for businesses to seek a more personalised and localised solution to funding through GC Business Finance, as well as access to a vast support network through the wider Growth Company, in turn helping Greater Manchester businesses to bounce back with confidence through an uncomplicated, digitally-driven and quick solution to unlocking finance.
The loans, which are 100% guaranteed by the Government but funded by GMCA, are estimated to be eligible for approximately 98% of Greater Manchester SMEs.
As with the Coronavirus Business Interruption Loan Scheme (CBILS), no interest will be due on Bounce Back loans for the first 12 months, with an interest rate set at 2.5% per year after the first year.
The fund targets eligible SMEs if their own bank is not an existing provider of the scheme, providing Bounce Back loans of up to £50,000 packaged with integrated business support in a local approach unique across the UK.
As part of The Growth Company, GC Business Finance will work alongside GC Business Growth Hub and other sister businesses to provide a tailored combination of financial and business support to SMEs across Greater Manchester, depending on the services required.
Andy Burnham, Mayor of Greater Manchester, said: “Innovation and resilience have been cornerstones of Manchester’s history – an approach that is needed now more than ever.
“We have a duty to protect and support our SMEs through this crisis, which means easy access to vital funds.
“The partnership between GMCA and GC Business Finance has, historically, proven to be beneficial for the Greater Manchester business community and more recently is a massive step in the right direction, taking control back into the hands of local businesses and ensuring a bespoke approach to lending that improves efficiency and helps to ensure survival.
“While it is a good first step, it is only that.
“To enable us to build back better, we need to make this style of funding available to all businesses across the UK, taking the burden off traditional banks and placing greater emphasis on diversity of funding.”
Cllr Elise Wilson, GMCA portfolio lead for economy and business, said: “It’s been an incredibly challenging year for Greater Manchester’s SMEs, with a second lockdown bringing further difficulty.
“While the ongoing emergency business loan schemes have provided a vital lifeline to many, we know there is more work to be done to help those businesses that fall between the cracks.
“Once applications are open, we’d urge any eligible local business to contact GC Business Finance to discuss the support on offer.”
Mark Hughes, The Growth Company chief executive, said: “This approach is an unprecedented step by Greater Manchester to support local businesses at a time of need. As we have seen with CBILS, banks have struggled to cope with the volume and variety of applications coming in from across the country.
“We pride ourselves at being at the heart of the business community, supporting economic growth and resilience, and are, therefore, ideally placed to deliver a solution that works for local businesses.
“GCBF’s tailored approach to lending, combined with the close connections of the Growth Company, means that we can provide a wider package of support to suit the needs of each individual Greater Manchester business.”
He added: “Once rolled out, this innovative approach could have a revolutionary impact on the way the UK distributes this funding and puts us, Greater Manchester in the best possible position to recover once the crisis is over.”
GCBF anticipate high demand, supporting applicants on a first come first served basis and expects the fund to be fully committed relatively quickly, at which point the fund will close.
Specialist social impact lender GCBF is committed to providing smart, fast, fair finance and will work with businesses and their existing bank, as well as offering a package of integrated business support alongside the Bounce Back loan to ensure the best chance of success.
Funding provided to GC Business Finance will be available immediately and will be accessible to small and medium-sized Greater Manchester businesses, with loans ranging from £2,000 to £50,000.