New £20m fund set to create 600 jobs and support 280 businesses in region

BEF, which operates across Yorkshire and the Humber, the North East and the North West, is one of three CDFIs selected to receive the funding, with criteria ensuring that the money goes towards “socially motivated lenders”, which are already lending around £100m per year to businesses which traditional and challenger banks or fintech do not service.

The fund is designed to support underserved communities including BAME and female led businesses.

Stephen Waud, CEO of BEF, said: “It’s good news that mainstream lenders such as Lloyds Bank recognise the transformative effects that CDFIs have in the communities they serve.

"It’s all about providing business owners, and aspiring business owners, with the opportunity to go to market with their ideas.

"There’s also a real focus on trickle up, rather than trickle-down economics, where job creation and wealth generation in these communities create proven economic change.

“We're thrilled to be one of the CDFIs helping to utilise this fund and support small businesses and local economies.

"We plan to support over 280 businesses and create nearly 600 jobs with the funds that we have, helping both female and BAME led businesses with the opportunity to prove their success.”

BEF, which marks 20 years of lending in 2024, specialises in providing finance to businesses in underserved communities, and aims to champion the “significant positive effects” that small business has in the post-industrial areas of the UK.

Funded by Lloyds, Big Society Capital and contributions from participating CDFI, CIEF aims to provide the CDFI with the capital needed to meet growing demand from small businesses.

The fund, which follows on from a successful first phase of funding, will continue to be managed by Social Investment Scotland (SIS), which has been investing in the social sector since 2001 and is itself a CDFI.

Responsible Finance and the Impact Investing Institute have also played a role in bringing the second phase of funding to fruition, as well as the three participating CDFIs.

The investment into CDFIs from a mainstream bank also marks a first in recent years.

Elyn Corfield, CEO business and commercial banking, Lloyds Bank, said: “Small and medium size enterprises are the heartbeat of the UK economy and as the largest domestic banking group, we have a proud history of supporting UK businesses to thrive.

"We’re therefore delighted to support the CDFI sector to back local businesses, with a focus on deprived areas, and ensure they have access to a range of financial options right for them.

“When local businesses flourish so do local communities and we hope our leadership within this second phase of CIEF will see many more areas of the UK succeed.”