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SMALL and medium-sized businesses could go to Solihull Council for financial help under plans to set up a £1m loan fund.

SMALL and medium-sized businesses could go to Solihull Council for financial help under plans to set up a £1m loan fund.

Under proposals, firms could apply to borrow between £100,000 and £200,000 from the local authority.

A similar arrangement is already in operation in Birmingham and now the borough is looking to make its own pot of cash available.

Officials have admitted there is more risk attached to these loans than to those made to other authorities or money market funds.

But they say that arrangements will be in place to ensure there is significant protection for the council.

Leader of the Council Ken Meeson said: “We would start with £1m to begin with and see how things progress.

“If we have no problems with bad debt and the money is being repaid on time, we could look at where we want to go from there.”

Coun David Jamieson, leader of the Labour group, sought assurances that the money would be ploughed into businesses which supported local jobs.

“If this was helping, for example, to create jobs in Birmingham, I would still applaud the idea - but be less enthusiastic than if it was targeting the borough.”

Officers assured him that the benefits to Solihull would be one of the criteria used when businesses were assessed for a loan.

Leader of the Lib Dems, Coun Ian Hedley, said once the scheme was up-and-running, the loans repaid should be put back in the pot to be used again.

“Otherwise,” he warned, “it’s not going to last very long. There will only be enough money to lend out to a handful of businesses.”

Solihull Council’s cabinet members agreed to take the loans scheme forward.

 

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