Programme launches to unlock £20 million of loans for cultural organisations
Thousands of arts organisations are set to benefit from a newly launched scheme that aims to unlock up to £20 million of loans for cultural groups across England by 2018.
Called Creative Industry Finance, the national programme – which is being funded by Arts Council England – will see free business support given to cultural organisations to help them apply to banks and other financial lenders for loans of between £2,500 and a few million pounds.
The programme aims to change the attitude of banks towards providing loans for smaller arts organisations in particular, which have traditionally been “averse” to lending money to the sector.
The new initiative is being run by Creative United, which provides financial services for arts groups and will use £500,000 annual funding from ACE to give 12 hours of free mentoring to organisations.
Groups will then be matched up to lenders to secure loans for a range of business functions – including artistic work, capital projects, and administration costs. While thousands will be able to apply to the scheme and benefit from mentoring, around 600 arts organisations are expected to obtain a loan over the three-year programme
The scheme was piloted regionally for two years from 2012 to 2014 with £1.1 million funding from ACE and led to almost 60 small and medium groups – including OperaUpClose – accessing loans.
This newly launched national programme is aimed at organisations of all sizes that have been trading for at least 18 months.
Simon Mellor, director of arts at ACE, said he hoped the scheme would encourage organisations to look to loans as an alternative source of investment to ACE grant funding in some circumstances.
He added: “Another challenge will also be how the financing sector might need to change its attitude towards risk in relation to arts and culture organisations. We know that banks have in the past been averse to supporting and investing in small and medium enterprises and obviously our sector is made of SMEs. I think this programme will change that.”
Creative United chief executive Mary-Alice Stack said: “We are hoping to build up the confidence and experience of creative businesses in borrowing and of the finance sector in lending.
“If we achieve that track record then I’m hoping that all the organisations we work with will begin to understand that just because you’re running a creative business it doesn’t make it more or less risky than investing in a hairdressers or restaurant for example.”
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