Investment

No single company has not defaulted on emergency loans issued by East Lothian Council on lockdown

NO single company given an emergency loan by East Lothian Council in the first month of the lockdown has defaulted on payments, a new report has revealed.

In a record described as “impressive” by a councilor, East Lothian Investments Ltd (ELI) said it had given more than £ 70,000 to businesses in the first month of the lockdown and, almost two years ago, had there are no defaulters.

The firm, which was founded by East Lothian Council and provides interest-free loans to county-based start-ups/businesses, said it launched a business interruption loan in March 2020 to help companies with serious cash issues. flow caused by lockdown.

It provided £ 70,200 to businesses with loans of up to £ 5,000 with a six -month repayment holiday and 24 months to repay.

A report from the firm to the council’s audit and governance committee this week revealed that the loans went to retail, hospitality and social enterprise businesses among others.

Richard Baty, manager of council companies, told the meeting: “Until January 2022, there were no loan defaults, a loan holiday was in place and a business entered into a debt settlement scheme that was not associated with Covid. ”

Councilman Stuart Currie said the outcome was “remarkable.”

He said: “That was remarkable given the current circumstances and I don’t think it was an accident.

“This demonstrates the due diligence put in by Mr Baty and the team.

“It’s not about picking winners, it’s about picking good prospects and I think that’s the key here.

“There’s a lot of money coming out the door for honest anyone to say: ‘Hello, I’m in business.’”

Mr Baty told the committee that since ELI was created in 2001, it has awarded more than £ 3.2 million in loans to 367 local businesses, creating 878 new jobs and protecting nearly 2,000 workers.

He said that in the last 12 years, the level of bad debts written off was at 3.12 per cent.

Asked by committee chair Councilor Jane Henderson if ELI was under pressure to increase, Mr Baty said there was no pressure on lending because there were other methods available now.

However, he said banks have “withdrawn” from lending to high street businesses and start-ups.

He said: “We have seen them this year in particular [banks] is not interested in start-ups.

“We heard through the grapevine talking to applicants where the banks said: ‘I really like your business idea but we’re not holding on to it.'”