Bank of Essex to bail out small firms

A “BANK of Essex” with �50million to invest in companies to help beat the recession is set to be given the go-ahead this week.

James Hore

A “BANK of Essex” with �50million to invest in companies to help beat the recession is set to be given the go-ahead this week.

Essex County Council's cabinet will meet tomorrow to vote on the proposal which would allow local businesses and entrepreneurs to loan up to �50,000 at “competitive rates”.

A branch of the bank is set to be opened in Chelmsford later this year and its services will be available on the internet and at the post office branches being reopened by the council.


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Lord Hanningfield, leader of the council, said: “This is not a credit union we are talking about, but a proper banking service.

“Our aim is to be able to lend local businesses and entrepreneurs up to �50,000 at competitive rates.

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“The Bank of Essex may sound strange, but historically it is not unusual. Giants such as Lloyds TSB can trace their origins back to a local community bank.”

The Essex FSB (Federation of Small Businesses) has thrown its support behind the scheme.

Chairman Iain Wicks, said: “Essex FSB has been closely involved in discussions and supports the objectives behind this decision which is to assist viable businesses in receiving credit facilities to help them continue trading by developing a lending model which is not based solely on computerised credit ratings.

“Having lending decisions made which are based on the viability of a business and local knowledge of the company and the people running it means that those decisions will be more relevant to the individual needs and circumstances of the applicant.

“We welcome the cautious approach being taken by Essex County Council which is making sure that each stage of the process is done effectively as well as quickly and we look forward to the launch in April when we will be able to circulate to our growing Essex membership the criteria and processes under which they will be able to approach the Bank of Essex for support.”

Mr Wicks said the FSB was hopeful that the cabinet would approve the proposal when it meets tomorrow.

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