Because the Covid-19 crisis has forced thousands of small businesses and social enterprises to close their premises, the North East Local Enterprise Partnership (LEP) has announced it is to match, pound for pound the money raised by eligible firms continuing to trade through Crowdfunder’s Pay it Forward scheme.
Pay it Forward was introduced to help small businesses and social enterprises keep trading by pre-selling goods and services. Crowdfunder has scrapped all platform fees and is covering transaction charges to make the scheme 100 per cent free of charge to users, and now the North East LEP, of which VONNE's CEO Carol Botten is a board member, will match fund through the initiative, awarding up to £5,000 to businesses employing no more than 10 full time equivalent employees.
Pay it Forward provides the infrastructure and coaching for small businesses to:
1) pre-sell goods and services,
2) adapt and ‘pivot’ their business into new ways of working and
3) stay connected to their customer base.
There are 45,800 small businesses employing 10 or fewer full time equivalent employees across the North East, many of which are in urgent need of financial support. The funds released by the LEP will provide urgent relief for those most in need, who do not qualify for other government schemes. The match funding is being sourced from the North East Investment Fund and will total up to £1 million.
Helen Golightly, Chief Executive at the LEP said: “Despite government’s best efforts, there are still some businesses in our region that are not eligible for government-backed grants or loans, leaving them vulnerable and at increased risk of closure. Many are turning to crowdfunding and the goodwill of customers and members of the public to generate some much-needed funds.
“Because of this, we’ve partnered with Crowdfunder to match fund appeals run by North East small businesses to ensure they receive the vital support they need at this time. Small businesses contribute significantly to our local economy and will play a key role in our economic recovery too.”
Eligible businesses must generate a minimum 25 per cent of their target from crowdfunding before they can apply for match funding from the North East LEP. If their application is successful, half the grant will be pledged right away, and the other half when they reach their 75 per cent of their fundraising target. Businesses that don’t reach their full crowdfunding target will still receive match funding, up to a total of £5k.
Rob Love, CEO, Crowdfunder said: “If you’re a small business whose livelihood has been turned upside down as a result of Covid-19, we are here to help. The power of Pay it Forward is to keep small businesses trading, help them think about their recovery, and to put them in a position to bounce back quickly.
“The continued trading through Pay it Forward, by pre-selling goods and services, ensures businesses can stay connected with their customers and enables entrepreneurs to adapt their offering. We are proud to partner with North East LEP to keep small businesses trading, retaining jobs and innovating for a brighter future”
Helen Golightly continued: “There’s been a real momentum around supporting local businesses with people buying gift vouchers and ordering take outs or deliveries to help small businesses through the Covid-19 pandemic.
“We want to encourage more people in the North East to support local traders, which is why we’ve promised to match every pound donated through an eligible Crowdfunder appeal, up to a maximum of £5,000. With the public’s support, that’s more than 200 small businesses in the North East that will benefit.”
How it works:
Small businesses can set-up a Pay it Forward campaign at: crowdfunder.co.uk/funds/crowdfund-north-east-lep.
Once set up, the small business can pre-sell their goods or services and adapt their offer to engage existing customers and potentially reach new customers as well. The small business sets a financial target to meet and throughout the process, coaching is provided by Crowdfunder to support the small business to meet their target. Once the financial target is met, match funding is released from the Crowdfund North East LEP monies. The total sum of the money is then released to the small business
The North East LEP is leading the North East Covid-19 Economic Response Group, a partnership that includes the CBI, North of Tyne and North East Combined Authorities. The group was launched with the support of industry, to provide maximum support for businesses in the immediate term and plan for long-term economic recovery following the Covid-19 outbreak.
For more information about the North East LEP and the North East COVID-19 Economic Response Group, visit northeastlep.co.uk. For more information about Crowdfund North East LEP, visit crowdfunder.co.uk/funds/crowdfund-north-east-lep.