Lloyds Bank has become the first major banking group to finance loans for delivery through socially motivated Community Development Finance Institutions (CDFIs) including BCRS Business Loans by backing the new £62m Community Investment Enterprise Fund (CIEF) which aims to invest in 800 small businesses nationally and support 10,500 jobs.

Funded by Lloyds Bank, along with social impact investor Big Society Capital (BSC) and contributions from the three participating CDFIs, BCRS Business Loans, Business Enterprise Fund and Finance for Enterprise, the CIEF will provide capital needed by small businesses.

BCRS will offer CIEF investment to SMEs across the West Midlands and Wales who are unable to access finance from traditional sources by providing secure loans from between £10,000 and £150,000 to support growth and recovery plans.

The new fund for small businesses operating in economically disadvantaged areas, which follows a successful first phase of CIEF funding, will be managed by Social Investment Scotland (SIS), which has been investing in the social sector since 2001 and is itself a CDFI.

Stephen Deakin, chief executive of BCRS Business Loans said: “The backing of Lloyds Bank is a game changer for business funding in the West Midlands and Wales, offering new opportunities to kickstart economic growth through the CIEF.

“BCRS Business Loans is delighted to support the delivery of the new CIEF, building on the impact we made by supporting a diverse range of businesses to grow and increase employment during the first phase.

“With the support of Lloyds Bank, the investment scheme will help ensure we continue to provide much-needed finance to small businesses across our region while stimulating local communities, creating jobs and driving economic growth.

“We look forward to building on our new relationship with Lloyds Bank to support business success for companies in some of the most economically challenged areas in the country to bring further positive social impact.”

Elyn Corfield, CEO business and commercial banking at Lloyds Bank, said: “We are delighted to support the CDFI sector to back local businesses, with a focus on deprived areas, and ensure they have access to a range of financial options right for them.

“When local businesses flourish so do local communities and we hope our leadership within this second phase of CIEF will see many more areas of the UK succeed.”

Since BCRS Business Loans was founded in 2002, it has provided loans worth more than £85 million to businesses.

A social impact report for the last financial year showed BCRS lent £6.5m to 72 businesses, safeguarding 999 jobs and creating 473 roles, adding £33.7m in value to the economy of the West Midlands and surrounding regions.