In one of the most significant developments in the governance or financing of Britain for a hundred years, local municipal banking has returned with the launch today of the groundbreaking Banking on Essex scheme.
Banking on Essex is the first major municipal banking scheme to be created since 1915 and will see Essex County Council (ECC) and Abbey Corporate Banking make available an initial £30 million of new liquidity in loans and overdrafts to viable local businesses through the creation of dedicated credit facilities.
The scheme is in direct response to the recession and is designed to support small and medium sized enterprises within Essex currently struggling to access funding through high street providers.
Loans and overdrafts of up to £100,000 will be available for eligible Essex businesses employing less than 250 people, with a turnover of less than £25m and who have been trading for at least 12 months.
The loans will be handled through a unique partnership between the authority and Abbey Corporate Banking, part of the Santander banking group. The bank will provide the credit and process capability to the partnership, together with a full banking infrastructure.
Businesses wishing to apply for funding should visit www.bankingonessex.com for details on how to apply.
Lord Hanningfield, leader of Essex County Council said:
"This is one of the most fundamental changes in how either our financial or governance systems operates and represents a huge shift away from an over centralised model back to a local system responsive to the needs of local businesses and their communities.
"The bedrock of the Essex economy, like much of the UK, is made up of small businesses that have been struggling in recent months to secure funding through normal lenders. This scheme will fill that gap
directly benefiting those companies and providing them with much needed support during the downturn.
"From one of the most centralised models in world, in Essex at least, we are willing to do things differently if it benefits our local communities. I am of course proud that the county is once again
leading the way."
ECC is making a total of £50 million available from its cash balances.