Insider Media Limited

Joint lending facilities and a growth of 'finance plus' agreements will form the future core of funding arrangements between investors and small businesses. That's the view of Paul Kalinauckas, chief executive of the Black Country Reinvestment Society (BCRS), who spoke to Insider.

Kalinauckas said he also hoped a wider variety of loans and investors would become available for the Black Country's small business sector.

He said: "Joint lending between providers is definitely on the increase – it gives flexibility, cuts down costs and gives the business more choice. I think we will also see a rise in the number of 'finance plus' facilities being taken up.

"These give the business a finance package, but can also provide mentoring schemes, consultant assistance and coaching. It makes a business more and more profitable. The real entrepreneurial types will grab every opportunity given to them, and the ones who run scared from the idea of help will lose out."

He said that the region needed more entrepreneurial figures to boost the local economy, as the lending landscape underwent a "radical" change.

"We love to help the real entrepreneurs - the ones who live and breathe their business – those are the ones that will succeed, and the ones that need the help. We need more of those, definitely," he said.

Kalinauckas said BCRS – which recently announced plans to lend £3m to small businesses in the Black Country over the next year – had seen enquiries from businesses "go through the roof" recently.

He said: "Of course, as funding options have become more limited, we have seen a surge in interest. For any business interested in funding, their first port of call will always be the banks, then organisations like ours.

"But we have a great relationship with the banks, and with other lenders – if they can't help a business, they will refer the case to us, and hopefully we or another investor will be able to provide some sort of assistance."

He said he hoped to see a change in the variety of both loans and investors currently on offer to small businesses in the Black Country.

"There's a real need for smaller equity packages, which are payable over a long period of time. Investors wouldn't see an immediate return, but they would over time.

"There needs to be a wider choice of loan and alternative providers – we completely agree with what the IoD (Institute of Directors) has been saying, that there's not enough competition out there among lenders, there's not enough choice in what they offer."

Kalinauckas spoke to Insider as BCRS prepared to host an Access to Finance event with the Black Country LEP this Friday (15 July).

James Morris, MP for Halesowen & Rowley Regis, will discuss the impact of the government's localism agenda on access to finance at the event, to be held at Wolverhampton Science Park.

Kalinauckas said: "One of the government’s aims is for more UK entrepreneurs and businesses to be able to access finance to enable greater levels of enterprise, whether through start-ups or growth. If we can make those journeys to find finance clearer for such people – then we are taking a step in the right direction."