How Michelin Man pumped in pounds sterling 5M to help smaller firms [Financial Mail on Sunday, London]
(Daily Mail (London, England) Via Acquire Media NewsEdge) Feb. 17--WITH small firms finding it ever harder to access bank funding, more big businesses are doing what they can to help.
French tyre giant Michelin set up a development fund with the aim of helping firms in the Midlands.
The company, whose UK base is in Stoke-on-Trent, Staffordshire, has provided more than 200 loans -- mainly to small and medium-sized firms in manufacturing and services -- and helped more than 180 companies, lending more than pounds sterling 5 million in a decade.
The programme, through which local businesses can apply to borrow up to pounds sterling 50,000, with interest charged at the base rate, has created more than 2,200 jobs in the region. Firms are also given access to advice on areas ranging from health and safety to recruitment, sales training and productivity.
The intention behind the loan programme is to drive job creation. Firms can use the loans to fund a range of projects -- from buying equipment to marketing -- providing the aim is to ensure more jobs are created.
Mike Cole, director of Michelin Development, says: "We launched the development fund to help the regeneration of local business communities and, in particular, to create quality sustainable jobs."
Chris Buckley, 40, set up Aerotherm in 2008 after losing his job when his employer closed down.
Aerotherm, also based in Stoke, provides drying and curing technology to food producers, and dust and fume extraction to the aerospace, defence and electronics sector, among other things.
Despite setting up just after the recession began, Chris had faith he could make the firm work.
"While it was a difficult time economically to launch a business, I knew that if we could make it work in a recession it would work well when times were better too," he says. "Putting my own home on the line to fund the business also focused my mind."
In 2010, Chris realised the business needed to relocate to bigger premises to "grow to the level that our blue-chip clientele expected."
He applied for two loans of pounds sterling 45,000 and pounds sterling 12,000 from Michelin, which, with other funding, he also invested in creating a strong digital marketing strategy. Aerotherm has gone from employing 11 staff in 2010 to 33 in 2012 and has a turnover of pounds sterling 3.3 million.
Chris says: "The process of accessing finance through Michelin was very simple and it gave us very good advice on expanding.
"We are on track to turn over pounds sterling 5 million next year and we will be taking on more staff."
Other companies taking measures to support smaller businesses in their area include broadband and telecoms company KC, which is stepping in to plug the lending gap left by banks with its initiative KC Invest.
The business, which is part of FTSE 250 company KCOM, has lent more than pounds sterling 140,000 through its investment fund, supporting 58 jobs in its local Hull area.
And it urges other big firms sitting on piles of cash to do likewise. Finance director Sean Royce says: "It is good for our business and promotes our brand."
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