Birmingham City Council hopes to free up billions for city SMEs after investing £500,000 in an innovative supply chain firm.
The authority has taken a stake in supply chain finance specialist, Obillex, which it recently appointed to provide a new supply chain finance technology platform.
Leader John Clancy said it would mean small and medium-sized business suppliers would be given access to finance quickly and more cheaply than generally available.
READ MORE: {}
Birmingham has become the first local authority in the 海角视频 to sign up to Obillex, which is widely used by large private firms.
Coun Clancy said: “We recognise that SMEs are the lifeblood of the Birmingham economy so are fully supportive of anything that helps such businesses flourish.
“The product we have trialled, developed by Obillex, helps ensure our supply chain gets paid as quickly and efficiently as possible, stimulating economic growth and helping generate or protect jobs in our communities.
“Given we believe so strongly in the potential of this product for other local authorities and large corporate organisations, we are delighted the Finance Birmingham mechanism is being used to support its development and future success.”
The Obillex supply chain finance system leverages the city council’s creditworthiness to attract funding from investors to allow rapid payment of suppliers’ invoices.
Most Read
The cost of the finance is kept low as investors are willing to take a small return on each transaction due to the potential high volumes involved and the low risk based on the council’s good credit rating.
The £500,000 investment was managed by the council’s Finance Birmingham arm.
The investment has helped to encourage Obillex to base its business in Birmingham, and create eight new jobs in the city to date.
Obillex chief executive Damian Crowe said: “This is a hugely important commitment from the Council, and a significant recognition of the potential offered by our supply chain finance technology solution and collaborative model. It also sends out a positive statement to local people that their council is investing in the future wellbeing of their communities by providing critical funding support for small to medium-sized businesses.”
Sam Miller, investment director at Finance Birmingham, said there was an estimated SME turnover of £128 billion in the West Midlands – and £17 billion is tied up at any stage with firms waiting to be paid.
He said: “By enabling SMEs to be paid early or on time and in full, the company is creating greater liquidity amongst local firms and boosting their working capital reserves.
Birmingham has a reputation for welcoming the growth of SMEs and start-ups.
It was named the 海角视频’s entrepreneurial hotspot last year with more than 18,000 new companies registering in the city during 2014 – more than any other region.