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Cash boost for businesses

PUBLISHED: 11:39 06 July 2009 | UPDATED: 14:20 03 July 2010

SMALL businesses in Norfolk and people struggling to get credit could be helped by two new recession-busting initiatives totalling more than £500,000.

Norfolk County Council is looking to help dozens of local firms get access to the cash they need to grow and support their businesses.

SMALL businesses in Norfolk and people struggling to get credit could be helped by two new recession-busting initiatives totalling more than £500,000.

Norfolk County Council is looking to help dozens of local firms get access to the cash they need to grow and support their businesses. The authority is proposing to give £400,000 from its reserves to Foundation East, a region-wide not-for-profit organisation which lends money to new and existing businesses struggling to get bank loans.

And the council also wants to provide £150,000 of funds to the Norfolk Credit Union aimed at breaking the poverty cycle of those who cannot get bank accounts.

Many employers and companies such as utility firms will not consider people without bank accounts for work or custom because they cannot make direct debit payments.

That often sees them forced to turn to loan sharks for cash or to sign up to dearer-premium meter payments for gas and electricity and get locked into a poverty trap.

The council's ruling cabinet will consider the measures in a paper due out this week, which is set to take the support provided by the authority to around £1m.

Previous schemes to help during the downturn have included extra funding for the Citizens Advice Bureau, and aiding contractors by bringing forward work and ensuring that payments are made promptly.

Brian Iles, cabinet member for economic development, said the initiatives were aimed at giving a hand to small firms at a time when finances were tight, and helping beat social exclusion by working to keep the vulnerable or those who have lost their jobs out of the clutches of loan sharks.

“Everybody says that banks aren't lending any money, but in fact they are, but only to people where they are 100pc sure they are going to get it back,” he said.

Chris Starkie, chief executive of Shaping Norfolk's Future, which was involved in brokering the two initiatives, said they could make a real difference.

“We know there are businesses out there which are viable but are struggling to get banks to extend their lending because of the pressures on the banking system,” he said.

“We hope that this will help some of them. By making use of the Foundation East facilities the county council can provide significant help to businesses in Norfolk.

“What businesses really want is cash in their hands and this is a very powerful step in that direction. The credit union initiative has the potential to make a real impact on those in most need.”

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