Workcentre enterprise fund lends to businesses
In 1981, honey producer Colin Isles donated the start-up capital to the Golden Bay Workcentre Trust for the Small Business Enterprise Loan Fund, a micro-credit scheme to encourage and support local enterprise by providing a low-cost source of finance.
Over the years, the Tindall Foundation has also made contributions to the loans fund to increase the capital base, enabling the Workcentre to offer a limited number of larger loans and to keep it going strong.
“The loans fund is designed for people who have limited access to other avenues of funding or lack the necessary security or track record to be able to borrow from conventional sources,” said spokesperson Mik Symmons. “The scheme is geared to business only, often to buy equipment or tools to turn a hobby into a more serious income stream.”
Since its beginning, the fund has recycled $254,290 throughout the community to 187 applicants. Last year alone, 13 loans were made, totalling over $18,000. The majority of loans are in the medium category of up to $1500. Larger amounts, termed “serious loans” are subject to more rigorous criteria.
Borrowers need to fill in an application form and discuss their business plan with the loan administrators. A personal guarantor, ideally a local resident or family member, is required to sign the form before the application is presented at the next trust meeting to consider the loan and discuss the conditions.
Loans are made usually for a 12-month period; however, in cases of financial hardship, terms can be re-negotiated. Although no interest is charged for the loan, all borrowers pay a one-off administration fee which is structured into their repayments and is used to increase the funds, cover administration costs and acts as a buffer to cover for bad debts.
“The structure of repayments is such that even someone on a tight budget can manage the repayments. But we have to be realistic, and a debt is a debt and it will have to be repaid,” Mik said. “The greatest risk is when people move from the Bay and go underground, and the worst case scenario is that as a last resort we have to use a debt collection agency.”
So far, however, people have honoured the agreement, Mik added, and have “respected and nurtured this community asset.” For further enquiries contact the GB Workcentre Trust, ph 525 8099.
Ina Holst
