London Business Loans Wholesale Ltd London Councils

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London Business Loans (Wholesale) LtdLondon
Councils
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• London Business Loans (Wholesale) Ltd
• is managed by GLE oneLondon
• It is currently comprised of
• private sector investor capital and loans
• private equity investor capital and loans
• public sector equity
• LBL continues to seek
• further public and private sector capital
• further retailers and retailer deposits
• to enhance its lending
• The Wholesale Fund
• has been devised for the London region
• is a tested model in operation for since late
  2007

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• The principal activities of the fund are to
• Attract investors
• Increase the size of the fund to ensure
  sufficient capital is available to lenders to
  small and medium sized enterprises
• Attract retailers
• Increase the number of retailers that obtain
  facilities with the fund to lend to small and
  medium sized enterprises
• Lend directly
• Under certain defined criteria lend directly to
  small and medium sized enterprises

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• Progress since operational activity began in late
  2007
• (All figures are accurate as at 31/08/2009)
• Three equity investors
• GLE oneLondon equity 250k
• London Development Agency equity 250k
• Kingston Smith loan 10k
• Three loan investors
• Co-operative Bank loan 3m
• Kingston Smith loan 100k
• LDA loan 2.25m
• Five retail loan providers
• GLE oneLondon facility 1.3m
• North London Enterprise Fund facility 500k
• Westminster facility 135k
• Bexley facility 250k
• Lambeth facility 400k

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• To date the fund has lent a total of 3,888,000
  to 149 businesses retaining the employment of
  over 400 people.
• All these businesses would not have been able to
  access mainstream finance and all were to small
  and medium sized businesses in underserved and
  disadvantaged communities in London.
• The majority of these loans were for sums less
  than 50k, although a handful are for much larger
  amounts to social enterprises.

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• The uniqueness of the fund is that retailers can
  access capital by risking only a fraction of
  their own.
• The fund leverages their cash risk deposit
  typically by a factor of 4, for example, allowing
  the retailer to access a facility of 200k by
  risking a cash deposit of only 50k.
• Furthermore, their cash risk deposit is only
  reduced by 50 for every written off loan, with
  the remainder being risked by the Fund itself.

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• The retailers of the fund are typically Community
  Development Finance Institutions (CDFI) but can
  be any non-bank lender who provides loans to
  Londons businesses when they have difficulty
  accessing mainstream finance.
• We have recently also set up Council retailers
  where their facility was managed by GLE oneLondon
  on their behalf, in these cases GLE oneLondon has
  worked with local Councils preferred and funded
  Enterprise Agencies.
• This allows the fund to reach the clients of
  established small business lenders without having
  to duplicate what is available already in the
  market.

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• The main return to existing investors is by way
  of Community Investment Tax Relief (CITR). This
  tax relief is 5.
• The main return to London Business Loans is often
  interest on facility provided, typically 5.
• The main return to retailers is their fees and
  interest on the loans provided. Where GLE
  oneLondon has taken on the management of the
  facility and work related to providing loans, the
  retailer has foregone this and provided some form
  of either revenue funding and/or agreed a set
  level of lending for which any remaining cash
  risk deposit is retained by GLE oneLondon.

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• Timeframes
• Investors
• LBL is already an established fund that is ready
  to receive investors. The timeframe will depend
  largely upon devising a structure to ensure a
  return for any investor appropriate to its
  requirements.
• Retailers (or pseudo-retailers)
• New retailers need to go through a process where
  their ability to lend is tested against their
  previous track record as well as an evaluation of
  their current systems and processes. This may
  take one or two months depending on the
  complexity of the organisation.
• GLE oneLondon is already an established retailer
  and can act as a the loan management team for a
  pseudo-retailer wishing simply to place a cash
  risk deposit. This can work very quickly and
  typically the limiting time factor is the
  organisation providing the cash risk deposit and
  identifying and agreeing special terms of their
  lending needs.

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• Next steps
• LBL to invite each Council to examine and
  understand its operations
• Agree a structure viable for each Council to
  achieve its business objectives
• Once these two vital steps are achieved we will
  have a clearer picture of further progress

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• Contact details
• Nicholas Nicolaou
• Fund Manager of London Business Loans (Wholesale)
  Ltd
• Managing Director of GLE oneLondon
• Telephone [phone]
• E-mail nicholas.n_at_gle.co.uk