Tyre company Michelin has an established fund to help entrepreneurs in UK regions where it operates factories. And there's more demand for its loans than ever, as Richard Cree discovers

When a small business needs financial support, a large local employer is unlikely to be the first place they look. But small firms based in Stoke-on-Trent, Dundee, Ballymena or Burnley can turn to Michelin for exactly this sort of help.

The company set up its own business development arm, Michelin Development, in 2004 to assist the local economies where it has factory operations or (in the case of Burnley) where it used to have a plant.
Under its business loans scheme, Michelin Development grants unsecured loans to small businesses and start-ups locally, with the aim of generating wealth and jobs. In Burnley, this has helped ease the pain caused by factory closure.

Unlike some of the much-criticised government-run enterprise schemes, there is considerable evidence that several small firms are finding the help they need. Indeed since its launch, Michelin Development has lent more than £3m in unsecured loans, with plans to lend another £1m in the next year.

Loans are offered to successful start-ups or young businesses after a detailed application and vetting process. So far, the fund has helped around 80 firms.

One beneficiary is Stoke-on-Trent company WF Property Preservation. Created in 2005 by Darren Wild and Michelle Fox, the business specialises in damp proofing and fixing problems such as dry rot. While the property market may have dipped, their firm has kept growing. To try to expand further, the pair recognised they needed to invest in new staff. Employing more people meant they needed to borrow money, so they turned to their bank.

Sadly, the bank took a more cautious view of the company's prospects, as Fox explains: "Having spoken to the banks it became quite clear that they would not support us. They weren't prepared to take any chance, despite the fact we had a strong business proposal that was looking to create jobs and regenerate the local economy."

Enter Michelin Development, which lent the business £20,000, and has allowed the founders to take on extra staff and grow. This expansion allowed it to take on a major contract as an approved supplier to Kier Group, working on a Stoke-on-Trent regeneration project.
Last year, Michelin Development called for more businesses in north Staffordshire to take part in the scheme when it became clear that take-up around the company's Stoke-on-Trent base was notably lower than for other regions it supports.

Dave Smith, north Staffordshire business development manager for Michelin Development, is confident that the scheme is making a difference. "Assisting companies such as WF Property Preservation plays a part in injecting sustainability to the local economy," he says. "This in turn will help create a climate in which other start-ups and enterprises can flourish.