European business lender Iwoca has promised to lend £220m to small- and medium-sized enterprises (SMEs) in the north of England over the next three years, to help the region recover from the coronavirus crisis.
The pledge comes after new analysis shows that the northern regions of England have the biggest proportion of businesses in worst-hit sectors such as accommodation and food services, and the arts.
Iwoca has estimated that this area could lose between six and 14 years’ worth of growth due to the financial hit created by the pandemic.
“Small businesses around the country have been hit hard by the pandemic, but it’s clear that some parts of the country – particularly the north – are suffering disproportionately,” said Christoph Rieche (pictured), chief executive of Iwoca.
“We want to support business owners in these areas to give them the best chance of recovery over the next few years. With this financial commitment we hope that we can drive up growth and help businesses across the north thrive.”
According to Iwoca’s own research, the north east, north west and Yorkshire and the Humber are forecast to lose 11.7 per cent, 11.2 per cent, and 12 of gross value added (GVA), respectively in 2020.
These losses would erase the economic growth made between 2004-2018 in the north east, between 2012-2018 in the north west and between 2010-2018 in Yorkshire and the Humber.
Iwoca pointed out that recently-implemented Tier 3 restrictions could compound the economic effects in the north of England. The lender’s aim is to lend £220m to small businesses in the north by the end of 2023, to help minimise the negative economic impact of the coronavirus.
Iwoca recently opened an office in Leeds, and it has funded almost 3,000 small business customers in the north of England over the past two years.