Lancashire’s own “stock exchange” has the potential to kick-start businesses throughout the county, it has been claimed.
A new partnership between Lancashire County Council and online lending marketplace, Funding Circle, has created the country’s first, Local Business Lending Partnership.
The county has put up £100,000 of its own cash to guarantee 20% of the funding required by firms from the county which will then bid onto an online marketplace to win backing from thousands of investors across the world.
James Meekings, co-founder of the Funding Circle, said businesses were waking up to the opportunities to borrow money from sources outside of high street banks.
He said: “If you go back ten years, a business could secure funding from a bank knowing they would get the money, now they cannot be so sure.
“Banks are only one source of funding and without funding a business does not have the oil to run its engine.
“We believe what Funding Circle is offering is another tool in the kit for businesses looking to grow.”
Funding Circle, which was set up in 2010, is currently backed by savers and business owners but is talking with other public sector bodies, pension funds and corporate lenders about backing it.
County Coun Michael Green, the council’s cabinet member for economic development, said it would look at putting more cash into the initiative, if the £100,000 pilot worked.
He said: “It is about being supportive of businesses which bring jobs and growth to Lancashire and is another part of a much wider package of support we have put together as a county council.
“We want to unlock the potential Lancashire has to make sure we are open for business.”
Dave McDonald, managing director of Chorley-based Poppy Signs which borrowed £30,000 through the scheme this summer, said it expected to add an extra two staff to its eight-strong workforce from work generated by the loan.
He said: “I am not criticising banks because they have supported us, but using Funding Circle gives us an edge.
“Our business plan is to double the size of our business in two years.”