Fledgling creative organisations will be able to apply for ACE-backed loans to enable them to pursue projects that may not be eligible for cash from mainstream lenders.
MTSOfan (CC BY-NC-SA 2.0)
Barriers to obtaining sustainable funding for creative businesses are being lowered with the launch of the Creative Industry Finance (CIF) initiative across England at the end of this month. Launched as a pilot scheme in 2012, CIF will offer up to twelve hours of free sector-specific business support for creative enterprises, as well as the opportunity to access loans starting from £2,500. Creative and cultural organisations that have been trading for at least eighteen months will be eligible to apply for cash to support their growth and development.
A combination of factors present challenges to creative businesses needing development finance: they are often perceived as being high risk, in part due to a lack of tangible assets. Also, many are run by young entrepreneurs with no lending history. The CIF scheme, which is being run by Creative United, a Community Interest Company (CIC) backed by Arts Council England (ACE), aims to break down these barriers. As a CIC the organisation aims to deliver a combination of social and financial returns. It’s publicly funded schemes also include Own Art, providing interest free loans for the purchase of contemporary art and craft, and Take it Away, offering similar loans for the purchase of musical instruments. A commission of 1% of all loans approved through CIF will be reinvested into Creative United to fund further programmes supporting the creative industries in the UK.
CIF’s pilot programme ran for two years and provided free business development support and loans to micro, small and medium size creative industry enterprises in London, Yorkshire and the Humber. Fifty-seven businesses received direct loans and more than thirty accessed additional finance elsewhere. The total value of business growth to businesses supported in the first year of the pilot was £1m. Lee Steele of The Potter Man, one of the recipients of a loan from the pilot programme, said: “I applied to the Creative Industry Finance programme because I wanted to work with an organisation that understood the needs of artists as well as providing financial support, expertise and encouragement. The application process... gave me confidence in my business idea and its viability.”
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