In one of the most significant developments in the governance or financing of Britain for a hundred years, local municipal banking has returned with the launch today of the groundbreaking Banking on Essex scheme.
Banking on Essex is the first major municipal banking scheme to be created since 1915 and will see Essex County Council (ECCand Abbey Corporate Banking make available an initial £30 million of new liquidity in loans and overdrafts to viable local businesses through the creation of dedicated credit facilities. The scheme is in direct response to the recession and is designed to support small and medium sized enterprises within Essex currently struggling to access funding through high street providers.
Loans and overdrafts of up to £100,000 will be available for eligible Essex businesses employing less than 250 people, with a turnover of less than £25m and who have been trading for at least 12 months.
The loans will be handled through a unique partnership between the authority and Abbey Corporate Banking, part of the Santander banking group. The bank will provide the credit and process capability to the partnership, together with a full banking infrastructure.
Businesses wishing to apply for funding should visit www.bankingonessex.com for details on how to apply.
Iain Wicks, Chairman of the Essex Federation of Small Business said:
"Essex County Council is demonstrating the entrepreneurial spirit which is the hallmark of so many of the county’s businesses, and we expect the Bank of Essex to provide support to those firms needing short term financial support which cannot be obtained from their own bank, even though the business itself is viable and has a good future."
Shaun Kelly, Head of Business Development at Abbey Corporate Banking said:
"This innovative agreement with Essex County Council is a strong signal from one of the strongest and best capitalised banks in the world that we are open for business and keen to support the SME sector in the UK. The Banking on Essex scheme will provide a lifeline to many businesses in the region, that are not only encountering challenges in their own business but are also finding their banking facilities being repriced or withdrawn with little consideration to the wider or historic relationship.
"We see this as the start of a relationship journey along which our aim is to provide a breadth of financial solutions to our shared clients. We are delighted to be part of this scheme and are currently talking to other local authorities about similar schemes."
The scheme has also won support from the British Chambers of Commerce, British Bankers Association and the Local Government Association.
ECC is making a total of £50 million available from its cash balances.
