Agenda item

David Wimble (Cabinet Member for Economic Developments and Special Projects) and Susan Berdo (Strategic Programme Manager) were in attendance for the Item.

1. The Cabinet Member for Economic Development, Mr David Wimble, noted the significant contribution of the fund to business growth and job creation and invited the officer to present further details.

2. Susan Berdo, Programme Manager, reminded Members that the KMBF utilises recycled Regional Growth Fund monies to provide repayable loans to businesses to support growth, productivity and job creation. The officer outlined the existing KMBF standard and small business boost offers and the proposed changes following an annual review by the Investment Advisory Board (IAB). The main aspects discussed were:

a)    Current KMBF standard offered Loans from £100k to 600K with 0% interest and required a 50% match funding with security being provided to the full value at least to the value of the loan and commensurate with risk.

b)    The Small Business Boost had provided 0% loans between £26k and £99k, with businesses contributing 20–30% match funding. Although initial guidance suggested security might only sometimes be required, experience since launching in November 2023 had showed that security was now often applied to help protect and sustain the fund for long?term recycling.

c)      The officer discussed the Increased upper limit of KMBF Standard loans from £600k to £750k.

d)    Allowing start?ups to apply where they can demonstrate contracts, experience, security and financial viability and allow extension of repayment periods for loans from £600k with an adjusted administration fee. Loans from £100k to £600k would pay a 10% admin fee. Above £600k would be subject to a 15% fee.

e)    Standardising match funding requirements in the small business boost to 25% and removing franchises from the list of excluded sectors. The focus was to be growth, higher productivity and job creation, supported by desirable outcomes such as innovation, stronger supply chains, environmental benefits and improved skills. The attached paper confirmed the changes that had been recommended by the IAB.

3. Members raised the following questions:

a)    Discussed sustainability of the fund, including interest arrangements and future projected burn rates. Officers elaborated that the fund was expected to operate until at least 2032 with an agreed profile of annual lending. Additionally, it was explained that the programme was income generating with administration fees covering delivery costs and any interest gained would be retained within the fund.

b)    Queried the distribution of loans across districts and how gaps in take up were identified and addressed. Officers discussed that promotion was undertaken through the Growth Hub, planned roadshows in each district and close working partnerships with district economic development teams would also target potential district gaps. Details of loan distribution and historic funds would be provided in the regular biannual monitoring reported to the Committee.

c)      Members asked for assurances on an even and fair distribution of loans throughout Kent, and if there were any concerns on the default rate of loans and where any interest garnered from loans is redistributed.

d)    Officers responded to distribution questions by expanding on the close working with district economic development teams and run joint promotional events with EDO colleagues. It was explained that the promotion of the work was captured through a dedicated website, KCC pages and Growth Hub social media campaigns. The use of promotional videos and case studies to highlight success stories were also discussed.

e)    It was confirmed that KCC could provide loan funding for businesses in Kent and Medway until 2032, with an agreed annual delivery of around £3.5 million. Funds currently held would be distributed, while repayments would continually be recycled back into the programme. Any interest earned must also return to the fund and be used solely for this purpose. The presenting officer would look to request data from the finance team, as the Investment Advisory Board reviews this information annually.

f)        Suggestions were acknowledged that a list of the distribution of loans be provided to Members, officers agreed that any lists provided could aid in identifying any gaps and help in understanding why some areas were less reached than others. Officers would look to send the last biannual report to Members and provide a snapshot of activities for the current financial year.

RESOLVED to endorse the proposed decision, namely:

That the Cabinet Member for Economic Development & Special Projects agree to:

(a)     Accept the improvements and changes to the loan terms of the Kent & Medway Business Fund (KMBF), to take effect from 1 April 2026. This includes adopting a revised loan offer, updated terms, and refreshed eligibility criteria for businesses within Kent and Medway

(b)    Endorsethe current scheme governance and administration processes