Zero Interest loans in 2022? Do tell….

I recently attended the latest meeting of the Kent Corporate Finance Alliance (KCFA) at the Black Horse Inn this week.

Given the number of projects I’m focussing on at the moment, the wine and sandwiches went down very nicely as we listened to a presentation by Sue Berdo of the Kent County Council on the Kent and Medway Business Fund (KMBF) Standard Loan scheme and Small Business Boost.

Sue ran through the two funds which are open to SME businesses in Kent and Medway that are looking to grow or innovate, as well as those that are looking to relocate to Kent and Medway. Whilst priority sectors, including manufacturing, life sciences, logistics and construction, have been identified, businesses in other sectors (subject to certain exclusions which are otherwise funded by the government) are not precluded from applying.

The KMBF standard loans are open for applications and are available with 0% interest and a six month repayment holiday, with the loans to be repaid over a five year period. Covering amounts between £101,000 to £499,999, they require 50% match funding for the project and the KCC will usually also take security over the company’s assets. Personal guarantees may also be required.

In contrast, the Small Business Boost which opens next month is aimed at start-ups and businesses in the early stages of growth or for smaller businesses looking for a bit of extra help. Loans can range between £26,000 to £99,999 and only require 20-30% match funding. KCC will generally not require any security and, similar to the Standard loans, these also attract 0% interest and come with a six month repayment holiday.

It is worth noting that both loans are subject to a 5% administration charge.

Whilst the KMBF loans have been around in one form or another for quite some time now, it is always surprising how many businesses and advisors in Kent are not aware of them. Designed to help fund businesses where the banks cannot, or where the banks are unwilling to provide the full amount of funding required for a project, these loans can fill a vital gap for businesses in the Kent and Medway area and those who are looking to move into the county and for a relatively low cost and on a surprisingly flexible basis.

As aware as I am about the levels of debt which a lot of businesses have taken on in the last two years (and if you’re worried about this, do get in touch) I would strongly encourage any business in Kent or looking to move into Kent to consider whether these loans could be the right fit. For more information, do visit KMBF’s website here or contact KCC here.

And if you aren’t already aware, the KCFA provides a great networking and knowledge share opportunity for transactional advisors based in Kent. If you’d like to come along, the next meeting will be held on 27 September. Further details are available on their website here.

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