Industrial Common Ownership Finance Ltd

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Industrial Common Ownership Finance Ltd

• Andrew Hibbert
• Development Manager

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Industrial Common Ownership Finance Ltd

• Provider of Loan Finance to employee ownerships,
  co-operatives, community businesses, social firms
• Established 1973
• The only self-sustaining provider of micro-
  finance in the UK

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Industrial Common Ownership Finance

• Sister organisation Of Industrial Common
  Ownership Movement
• Lobbying Legal Services
• Merged with Co-operative Union to become
  Co-operatives UK

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Sources of CapitalWhere we Get Our Money From

• 1976 central government 250,000
• Local specific funds
• The golden age of worker co-ops in the 1980s 1
  million
• Share Issues
• 1987 PLC 1 million
• 1994 Community Capital 1 million
• Community Investment Tax Relief
• April 2003 Co-operative Bank 1million

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ICOF Offers

• Loan Period - 2 months - 10 years.
• Loan amounts - 5,000 - 175,000.
• Interest rates average 9
• Appraisal fee.
• No other charges at all
• No early repayment fees, rescheduling fees,
  commissions, late repayment fees, charges on
  overdue interest etc

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The ICOF difference

• Friendly monitoring support.
• No demands for personal guarantees.
• No pawnbroking!
• No other unreasonable demands for security.
• Security is not a condition of a loan
• Though if it is there we will take it.

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Some Statistics

• 7,000 jobs created or sustained
• Loss rate of 4 of lending portfolio since 1995
• Loss rate of 18 of lending portfolio 1987-1991
• Around half our lending to new start
  organisations
• 8 million lent
• Half of this in last five years

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What do we look for when Lending?

• Co-operative or mutual structure
• Social /or environmental contribution
• Ability to repay
• Profit Loss Actuals / Forecasts
• Cash Flow Actuals / Forecasts
• Balance Sheet Actuals / Forecasts

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Our Revenue Income

• Interest on Loans Made
• Interest on Money in the Bank
• Back Office Services for other Lenders
• Fund Holding, collecting repayments, calculating
  interest, arranging security
• Loan Fund Management
• Monitoring and Appraisal
• Financial Services Authority Authorisation

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Co-operative Action

• Co-operative Commission proposal for a Foundation
• Co-operative Societies contribute
• Grants Fund
• Loan Fund managed by ICOF
• Equity Fund being researched
• The Loan Fund (18 months old)
• 766,000 Capital
• 355,009 lent no bad debts so far
• Max 75,000 feasibility loans, low rates for
  credit unions, delayed repayments.

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Rainbow Nursery

• North East Norfolk
• Serves 30 villages
• Capacity for 80 children
• Registered Charity

• Previously in private ownership
• Parents set up charity and eventually bought
• 50,000 loan as part of building costs (equity
  gap)
• 15,000 Cash Flow loan

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Daily Bread Warehouse

• Cambridge
• Co-operative owned controlled by the workers
• Paid employment of people with mental illness
• 600 square metre warehouse

• Start up capital of 30,000 for building
  preparation and while it moved into profit
• Sales now 1.2 million with 18 workers

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Hyperion Auctions

• St Ives - small market town
• Worker co-operative
• Restored premises in town centre

• 10,000 start-up loan
• Auctions of antiques and antique shops
• New life to town centre

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Energy Development Co-operative

• Lowestoft, Suffolk
• Supplier of solar panels, wind turbines, other
  renewable energy materials
• Co-operative

• 25,000 start up loan
• Now employing 7 people
• Profitable after 2 years

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Wood n Stuff

• Bury St Edmunds
• Sheltered workshop for people with learning
  disabilities
• Making wooden garden furniture and growing plants
• 20,000 to open retail outlet
• 30,000 loan to open new workshop in another town

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3D Logistics

• Sandy, Bedfordshire
• Industrial shelving
• Company in receivership
• Supermarket contract
• 20 workers in employee buyout
• Employee benefit trust
• 50,000 loan with 1 year capital repayment
  holiday

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• Industrial Common Ownership Finance Ltd
• Tel [phone]
• www.icof.co.uk
• icof_at_icof.co.uk
• 227C City Road, London, EC1V 1JT