Wholesale Loan Fund
| Project title: | Wholesale Loan Fund (CDFI accredited) |
| Dates run: | 2004 - present |
| Boroughs occupied: | Pan London |
| Funder: | London Development Agency, Kingston Smith LLP, GLE and the City of London Corporation |
| To establish a wholesale fund to lend to CDFI's across London using revenue capital to lend to disadvantaged businesses (new and start-up) |
The Wholesale Loan Fund is dedicated to helping London's most disadvantaged entrepreneurs. Created with private investment, the Fund provides the capital for locally run small business loan funds, right across London. As a result, the Wholesale Loan Fund will support thousands of entrepreneurs that are currently unable to access mainstream funding.
Despite London's prosperity, many residents are excluded from opportunities to improve themselves but see starting or growing a business as a means to generate fulfilment and wealth. The major hurdle for most is inability to raise finance. Whether this is because they have no track record, a poor credit history, no security, or are simply uncomfortable in banks, those who most need finance find it hardest to raise it.
In response, small loan funds have been established across London by local councils, charities, and concerned individuals. These local funds are in constant need of lending capital to meet the growing demand, and until now have had to rely on either limited government funding or private sector sponsorship. The Wholesale Loan Fund is a large-scale, perpetual and self-sustaining answer to this need.
For investors, the Wholesale Loan Fund provides the opportunity to support London's emerging businesses whilst earning a tax credit of five per cent per annum. The Fund is commercial and self-sustaining, expecting to return investors' money after five years.
For local loan funds, the Wholesale Loan Fund provides new lending capital on advantageous terms, to expand their operations and to support more businesses. The Fund also offers the chance for communities to establish a local operation.
Key highlights:
Investing in the Fund:
- investments are made for five years
- the Fund is permanent, commercially self-sustaining and expects to repay investments when they mature
- the Fund is accredited by the DTI to offer Community Investment Tax Relief
- investors benefit from a five per cent per annum tax credit
- your investment will benefit some of your most disadvantaged individuals
- the Fund has a unique design to minimise risk to investors
Borrowing from the Fund:
- local funds can be either new or existing business lenders
- provided with a revolving credit line, which can be drawn down when making eligible small business loans
- the risk of loan defaults is shared 50:50
- interest is charged at Base Rate and the local fund retains the interest they earn on their lending
Case studies:
Christina Ezeilo, Waterfield Supported Homes
"As well as a loan I've had lots of practical support: they gave me a mentor who was running through everything to make sure I got it right."
Andrew Smith, Eat Me Ltd
"Once you work for yourself you'll never want to go back, it's an amazing opportunity, you can work as hard for yourself as you can for someone else, and the benefits are a hundred times more rewarding."
Juliana Oei , Almost Famous
"I tried to get the funding myself for my business, that's where the struggle came in. I looked for banks and financial companies and they said no, then I found GLE oneLondon."
Idris Hussain, In Tha House
"I distinctly remember when I first went into a bank to meet the manager to ask for £70,000. Looking back he was probably laughing behind his chair thinking, 'he means well but if you've got no collateral and no experiences we're not going to give you the money."
Our partners:
This Fund is funded by GLE, the London Development Agency, Kingston Smith LLP and the City of London Corporation.
Contact us:
For more information on the Wholesale Loan Fund email wholesale@gle.co.uk or visit the website
