East Sussex Credit Union is opening its doors to corporate members for the first time and has pledged to offer a lending lifeline to local small businesses.
Historically the credit union has restricted its savings and loans activities to individuals, but now believes that the time is right to begin to provide some much needed help to the local business community.
Richard Priestman, President of East Sussex Credit Union said:
Over the years we have seen a steady stream of applications from local businesses unable to access small loans from mainstream lenders but until now have not had a product to offer them. This is changing and with our new initiative we are hoping not only to attract corporate members interested in borrowing from us but also those wanting to place funds on deposit too.
According to the Bank of England, lending to small firms slumped by £700 million in the first quarter of the year as banks shied away from business loans as they continued to rebuild their balance sheets. The government has accordingly been encouraging firms to turn to alternative sources of finance and East Sussex Credit Union sees this as an opportunity to help support the region’s small businesses.
Richard Priestman added:
Three quarters of the businesses in East Sussex employ less than 5 people and many are looking for a small amount of credit to help keep the wheels turning or to take a step up. Most major lenders are not interested in lending at this level, meaning that there is a sizeable opportunity for an ethical lender like us. We want to put our toe in the water in this area and are therefore keen to hear from firms who feel that we might be able to help them.
East Sussex Credit Union will lend up to £15,000 to corporate members and as with its mainstream personal lending activities is intent on offering loans at affordable rates of interest with individual loan transactions developed to suit particular needs. Annual rates of interest start at just 10.5% APR, with no arrangement or exit fees, while funds placed on deposit attract an annual dividend, can be easily accessed and are used to support others in the local community in need of lower cost credit.
Richard Priestman also said:
We are a socially responsible, not-for-profit company dedicated to supporting the people and small businesses of East Sussex with accessible, local financial services. With this latest launch we believe that we can offer a genuine alternative source of finance to a regional business community that occasionally needs a lending lifeline but currently has very few affordable choices.