Cheltenham Borough Council has become the first local authority to sign-up to a programme that fives small businesses access to finance to support their ability to grow.

The council have agreed a partnership with business-to-business provider FOLK2FOLK, an organisation that matches companies seeking finance with investors looking for a return.

Be becoming an FOLK2FOLK lender in its own right, the council will be able to invest money in local firms, enabling them to add directly to the local economy.

Councillor Rowena Hay, cabinet member for finance, said: "By partnering with FOLK2FOLK, we will be able to help local small businesses access finance to support their growth as well as continuing to help the council in its journey to become financially sustainable in this time of ever increasing government funding cuts.

"This step builds upon recent significant local investments and long-term financial planning, to ensure the continuity of frontline services and public realm investment.

"This approach has helped the council manage the impact following the loss of £6.8m funding since 2010."

Roy Warren, FOLK2FOLK managing director, said: "Our unique local lending model means we're the perfect investment vehicle for councils.

"By investing via our platform, the council will be using their cash reserves to lend to local businesses, enabling them to access the finance they need to start, grow, refinance or diversify.

"More than £300 million of investor funds have been injected, via our platform, into local businesses across a variety of sectors, including agriculture, alternative energy, leisure and tourism, hospitality and property development.

"There is often a flow-on of benefits to the wider community resulting from local investment.

"Usually this takes the form of job creation, retention of local talent and the shoring up of local supply chains, but it may also attract visitors to the area, increase house prices and result in improvements to local facilities and services; all of which contribute to the sustainability of healthy local economies which are essential for Britain's future success.

External auditors, Grant Thornton, gave the council's statements of accounts a clean bill of health at audit committee this September, demonstrating the council's effective financial management following several years of budget reductions.

The council's approach to financial sustainability has also recently achieved national recognition by winning the national local government MJ Award for 'Best Commercial Council.'

The panel of expert judges stated: "The judging panel was extremely impressed by Cheltenham Borough Council's 'whole council' approach to its commercial investment strategy.

"There was a clear link from strategy to the outcomes being evidenced, where the focus on delivering high impact social results for the borough was a stand-out feature."

Building on this, the council has just been awarded 'Best Commercial Council and Entrepreneurship Initiative' at the 2019 APSE annual service awards.

A recent Local Government Association peer review also noted that 'the council's finances are in a good position to withstand the uncertainties that lie ahead.'

FOLK2FOLK's business loans start at £50,000, range from six months to five years, and are secured against land or property.