Issue - meetings

Report of the Executive Director of Place

The Cabinet considered a report of the Executive Director of Place, that was also being considered by Council on 14^th March 2017, that sought approval for capital investment in the Coventry and Warwickshire Duplex Fund.

The Duplex Fund would provide a new type of financial product to small businesses that combined grants and loans. The net effect for the applicant was a loan at a very attractive rate. The fund would be managed by Coventry and Warwickshire Reinvestment Trust (CWRT), a local “community bank” that lent to businesses which struggled to access finance from banks. As loans to applicants were repaid, this would make cash available for new loans later in the lifetime of the fund. An important benefit of the proposal was that grant funding, which under normal circumstances would be used once, would form part of a ten-year programme of business support. The grant element of the funding would come from UK Government sources such as Growth Deal.

The Council proposed to offer CWRT a loan for up to £2m as its contribution towards the fund for supporting Coventry businesses. Warwickshire County Council were currently considering a proposal for a comparable investment in the fund to provide complete Coventry and Warwickshire coverage. Grant funding worth £5.4m would also be allocated, bringing total public investment in the fund to just under £10m. This would allow £20m in financial support to be offered to businesses as the fund recycled itself over a ten year period.

The Council’s investment would be protected by having a strong presence on the credit committee which would award funding from the scheme, setting an interest rate in the loan arrangement that reflected the risk, and by seeking appropriate security from CWRT. In addition, a business support fund like this could also be protected by a government-backed guarantee scheme.

Over the ten-year life of the fund, it aimed to:

·  Provide £20m in financial assistance to Coventry and Warwickshire Businesses

·  Create just over 1400 jobs

·  Support over 360 small and medium businesses

RESOLVED that the Cabinet recommend that the Council:

1.  Agrees to capital investment of £2m in the Coventry and Warwickshire Duplex Fund in the form of a loan arrangement.

2.  Delegates authority to the Executive Director Place and the Section 151 Officer, following consultation with the Cabinet Member for Strategic Finance and Resources and the Cabinet Member for Jobs and Regeneration, to:

•  Negotiate the detailed terms of the loan arrangement and appropriate security, ensuring state aid compliance.

•  Make such amendment and variations to the loan arrangement as is deemed necessary over the lifetime of the loan period subject to the overall capital investment not exceeding the sum of £2 million pounds.