At start up in 1997, ART raised grant funds from several sources to cover revenue costs – staff, marketing and rent etc. The major providers were Barclays, NatWest, Investors in Society and Birmingham City Council. As scale increased, income generation from interest and fees was able to cover all the overheads of the business, excluding bad debts.
Initially, capital for lending was obtained from a share issue to investors who invested for purely social purposes, raising about £360,000. Investors included large private sector companies, major banks, housing associations, local and national government, trust funds, high net worth individuals and other individuals wanting to put their money to work for a social purpose and support the economy in the area that ART served. They received no financial return.
Since launch, ART has been supported by local, national and European public sector funding, including the Phoenix Fund, the Regional Growth Fund and the European Regional Development Fund. The major loan provider to ART has been, and continues to be, Unity Trust Bank.
Following the closure of the Regional Growth Fund in 2015, ART and other CDFIs were encouraged to seek funding for their activities from local public sector sources. ART has established, with support from Birmingham City Council, Unity Trust Bank,ThinCats peer lending platform and loan investors using that platform, a targeted Birmingham Small Business Loan Fund to provide loans totalling £1 million a year for three years to March 2020.
All loans made to ART (to date in excess of £10m) have been for capital to lend to businesses and social enterprises and have either been fully repaid or are still being serviced in line with terms and conditions.