1. England Objective 2 programmes 2000-2006
ESF Loan Funds
England Objective 2 programmes

2. Why ? Limited access to loans Particular issues in deprived areas
Entrepreneurship focus of Objective 2 linked to ERDF supported initiatives
Micro businesses needed for economic regeneration
Job creation and new enterprises

3. The rules – Rule 8 of 1145/2003 Prudent business plan
Independent legal entity
When
Establishing business
Early stage “seed corn”
Expansion
State Aid rules
Investment exit policy > legacy fund

4. How ? Selection of Loan Fund providers Identifying the co-financing
Selection of Loan Fund recipients

5. Loan fund provider selection
Tenders
Strategic analysis of need
Ability to deliver > professional competence
Fit with Programme
Formal approval of Monitoring Committee

6. Co-financing No requirement to have public match
Can use all private match
Public match must be paid into loan account at same time as ESF
Private match must have legally binding co-investment agreement

7. Selecting loan fund recipients
Through a formal procedure
Application
Business plan
Commercial viability
Interview panel
Unable to access other funds
60% success rate of applications

8. Some facts and figures

9. The funds 7 England Objective 2 areas 9 loan funds
Total in funds £12.57 (€14.7) ESF
Range from £225k to £5M
About 4% of total programme funding
Spent 63% of total

10. New businesses started
2,186
Jobs created
2,396
Jobs preserved
891
Males into self employment
1,628
Females into self employment
855
Ethnic minorities into self employment
1,626

16. Conclusions

17. Positives
Number of loans on target (but smaller amount than anticipated)
Helped the right beneficiaries
Success with ethnic minority individuals

18. Drawbacks Limited number of possible fund providers
Limit of 5% on management costs
Significant underspend
Securing co-financing difficult
Requires a lot of managing & financial expertise

19. No loan funds in 2007-13 England Programme
No programme focus on area based economic regeneration
Reduction in ESF funding
Targeted on hardest to help
Availability of alternative start up funding