Business loan scheme launched to boost Tywyn economy

A pilot scheme has been launched to support start-up and early stage businesses in a mid Wales town hit by the closure of its major employer.

The Tywyn Upstart Scheme has been set up to encourage people with a business idea in Tywyn, Gwynedd, and up to 10 miles away, to turn their dreams into reality.

The scheme, which will offer micro loans and support to new and early stage businesses, has been developed to boost economic activity in the area.

Approximately 120 people in the town were made redundant following the closure of snack bar manufacturer Halo Foods in December. A minority of the workforce moved with the company to its new location in south Wales, leaving large numbers seeking alternative employment.
The Tywyn Upstart Scheme, backed by the Peter Saunders Trust and Purple Shoots Business Lending, will offer micro loans of
£500 to £3,000 to qualifying businesses for a period of one to two years, and workshops will be held to offer guidance and inspiration to budding business owners.

Designed to be an accessible service for people taking their first steps in business, The Tywyn Upstart Scheme has simpler procedures and fewer restrictions than lending schemes offered by the Welsh Government and other institutions.

The project will provide people with access to a straightforward application process that does not require the financial security or personal guarantees, which can act as deterrents for many.

The Peter Saunders Trust will make available to Purple Shoots Business Lending a loan fund totalling £30,000. Purple Shoots will assess each business proposal and provide mentoring throughout the process.

A special rate of interest for loans to qualifying businesses has been agreed at a competitive 9.5% per annum flat rate (18.5% APR) and the project will close to new loans on 31st December 2014. In addition, there are no arrangement or monitoring fees, and applicants will be supplied with regular support.

Peter Saunders OBE, founder of the Peter Saunders Trust, has strong links with the local community, having established Halo Foods in the town over 34 years ago.

He sold the business in 2004 and wanted to find a way of giving something back to the community following the closure by the new owners.

Saunders said:

“Having built a number of companies from scratch, I am passionate about helping people with good ideas start their own business. Sometimes a bit of support makes all of the difference.

“It has been a difficult time for Tywyn, but we are hopeful of helping a business to start up and grow into the next major employer in the area. When I started Halo Foods it had five staff and grew to have five hundred – about half of whom were in Tywyn. It would be wonderful if something similar could happen.

“Whether it’s designing a logo, building a website or buying tools, the support offered could help turn a dream into reality. I am looking forward to seeing successful businesses grow out of this fund.”

Karen Davies, Director at Purple Shoots Business Lending, added:

“Hard-hit communities are so often the focus of negativity, but The Tywyn Upstart Scheme will help people do something potentially life-changing.

“The idea of starting a business can be daunting, but we’re urging people to send their proposals to us. We’re open to all kinds of ideas, from a fishmonger to a computer coder looking to build the next Microsoft.

“Long-term unemployment tends to undermine people’s confidence, but this scheme will give business skills and independence to local people, and help to create sustainable employment in the area.”