The business loan service was set up by Stoke-on-Trent City Council and Black Country Reinvestment Society (BCRS) in June with an initial loan fund of £200,000 to provide loans of between £10,000 and £50,000 to Stoke-on-Trent businesses who are having problems getting the funding they need from traditional sources. Continue reading
A loan fund created exclusively to help Stoke-on-Trent businesses unable to obtain finance from banks has been officially launched by Stoke-on-Trent City Council in conjunction with the Black Country Reinvestment Society (BCRS).
Initially, £200,000 is available for lending to companies who are having problems getting the funding they need from traditional sources.
By Clare White
The Staffordshire Credit Union officially launched last week with an Open Day at the Dudson Centre and a celebration dinner sponsored by Co-operative Ltd.
The Credit Union has been several years in development, with wide cooperation between councils, housing associations and other organisations finally coming to fruition at the beginning of the year as the recession is plunging even more people into financial exclusion. Stoke-on-Trent has previously been rated the number one ‘red alert’ place in the country for the amount of people who cannot get access to financial services. This meant that people had to turn to loan sharks and other forms of high-interest lending to make ends meet.
The Credit Union encourages saving – members will need to have saved for at least 12 weeks before being considered for a loan, which can be for very small amounts and which is repaid at around 2% a month. This makes the APR of around 26% a year higher than mainstream banks loans and credit cards, but much lower than loan options that have been accessible to many people in the area before – for comparison, a £100 loan with Financial Provident would have an APR of 545.2%, according to its website. This is legal, but illegal loan sharks have been known to charge far more. In a Stoke-on-Trent case in April involving an armed robbery, the loan was being charged at a 1000% rate of interest.
Credit Union director Kevin Waters said: “It is estimated that £5 million left Staffordshire in interest payments alone to illegal lenders in 2003. This number will now undoubtedly be higher with local residents feeling the effects of the credit crunch.
“The Staffordshire Credit Union offers a sympathetic ear to ordinary people in this area. We provide access to a different type of financial service, one that helps those who may have previously been excluded from mainstream financial markets because they are seen as too much of a risk.
“We are working in partnership with Illegal Money Lending Team and anyone who is approached by a loan shark is urged to contact the Loan Shark Hotline on 0300 555 2222 immediately.”
The credit union offers financial services for everybody and members can save in various ways for Christmas, holidays and for young members of the family. All savings are protected by the FSA.
The Union is already ahead of its membership projections, meaning it will be able to start lending money in the next few weeks. In the meantime it needs wide sign-up and support from people throughout Staffordshire to help ensure that everyone has a fair lender to turn to whenever they need it.
For more information, visit the Staffordshire Credit Union website at http://www.staffscu.co.uk, call 0845 224 1215, join the Facebook group or drop in to see the team at the Dudson Centre in Hanley.
Have a look at the video below to find out more about the difference between a credit union and a bank.
Clare White is a member of the Staffordshire Credit Union study group and PnP would like to thank her for writing this article for us.