1. The North East Microloan Fund Peter Gilson Fund Manager, Entrust 26 th June 2012

2. Entrust: who we are… Small group of companies, not for profit, limited by guarantee: –Tyne & Wear Enterprise Trust Ltd t/a Entrust Ltd –Entrust Fund Management Ltd –North East Equity Matching Ltd –Street North East Ltd –Financial Inclusion Newcastle Ltd (FIN) –Service Network (North East) Ltd Customer Groups: –Pre-start –Start-ups –Existing businesses Work across the North East

3. £19m under management – loans and equity We manage public funds We have our own loan fund (Street North East) Financial packaging – cocktails: business planning and sourcing public / private funding Business Angel Network: Investor Forum Funds under management…

4. –Regional Enterprise Loan Fund –CDFI Pilot –Transitional Loan Fund –Street North East Loan Fund –North East Equity Matching Fund –North East Microloan Fund Funds under management…

5. Microloan Fund / “JEREMIE” Part of Finance for Business North East “superfund” - £125m Previously referred to as “JEREMIE” –Single Programme –ERDF –European Investment Bank (EIB) - £62.5m loan to be repaid on commercial terms INVEST for returns; do not give grants

6. Microloan Fund - Objectives Increase the creation of new enterprises Improve the survival rates of new businesses Improve the growth rate and profitability of existing micro and small businesses Support businesses where mainstream lending is unavailable Create and safeguard jobs

7. Microloan Fund – Customer Groups “Disadvantaged” i.e. individuals starting businesses / small enterprises who unable to source mainstream finance Individuals starting business who face some form of disadvantage (e.g. Unemployment, disability, residence) Individuals starting business who are not disadvantaged but cannot raise mainstream finance Existing sole traders, partnerships, micro and small limited companies who cannot raise mainstream finance Social (Third Sector) Enterprises are eligible

8. Microloan Fund – Key Figures Loan capital £5m (£1.225m per year) Lending periodTo December 2014 Number of Loans 500+ Output targets –New businesses 300+ –Existing businesses supported200+ –Jobs created and safeguarded1,100+

9. Microloan Fund – Loan Criteria Amounts£1k - £25k TermUp to 3 years Interest Rate6.5% above UK Reference Rate SecurityUnsecured but personal guarantees may be required from Limited Companies PurposeNormal business requirements

10. Microloan Fund - Eligibility Located in North East of England Viable but unable to raise funds elsewhere Must not operate in excluded sectors Must be an individual starting an enterprise or an established SME / Third Sector organisation

11. Microloan Fund – Progress Number of applications received:545 Number of applications approved:223 Value approved / drawn to date:£2.625m In Approval process:£162.7k Pipeline:> £500k

12. “Investment Readiness” “Loan repayment ready” Application Form –Business Plan / Overview of Business –Balance Sheet –12 month cash flow forecast –12 month P&L forecast –Personal budget –Business Assets & Liabilities Business Support available

13. Third Sector £25k - working capital - music industry training and events - cic £20k – website development - support services to voluntary orgs - clg £25k - working capital for growth - training / personal dev progs - cic £25k - working capital - business support and training for music industry - clg £5k - stock / equipment - gardening project for people with disabilities - cic £14k - equipment - recycling - cic £25k - equipment - training - cic

14. Assisted access Mindset that using debt is good rather than to be avoided; Be exposed to “the cost” of taking external expert advice and not only understand the value that the right external advice at the right time can bring, but also how to source and “buy” professional input independently in the future; Taking on debt can facilitate access to goods, products, services now that otherwise would have had to save for and hence can actually bring forward ability to deliver impacts – use the monies you would normally be saving for the asset purchase to repay the loan; Have systems in place which can alert to any operational difficulties which can then be addressed quickly thereby minimising any potential default and maximising the opportunity for learning for the future.

15. For more information: www.entrust.co.uk 0191 244 4000