An East Anglian high street firm is one of the first businesses in the country to secure a loan through a new government-backed financing scheme.
Tees Solicitors, which has six offices across four counties, has obtained £2m from Barclays under the National Loan Guarantee Scheme announced in this year’s budget. The scheme, available to businesses with turnovers of up to £50m, provides up to £20bn of government guarantees on unsecured borrowing. Banks use the guaranteed funds to offer loans at an interest rate one percentage point lower than that charged for ordinary commercial loans.
Tees plans to use the money to refurbish offices and finance mergers with other firms. It has already applied for an alternative business structure licence and installed accountant Paul Stothard as its first chief executive. Professor Stephen Mayson, director of the Legal Services Institute, was recruited last year as non-executive director.
The firm, originally set up as an agricultural practice, is due to celebrate its centenary next year. It says it will market itself as a top-end, high-street alternative to new entrants from the retail and insurance sectors.
Senior partner David Redfern (pictured) said: ‘Competition means law firms have to be more efficient in how this service is delivered. We have already made significant changes to our business model and now have a five-year plan of change, growth and rapid development.’ The firm currently employs some 200 people.
Tees was lent the money on the first day of the new scheme, which is chancellor George Osborne’s flagship policy for boosting small businesses through cheaper lending.
Participating banks - Barclays, Santander, Lloyds and RBS - retain the credit risk and can opt out depending on market conditions. There is no minimum loan amount, although banks may decline to offer smaller loans because of the relatively high administrative costs.
Tees is understood to be the only law firm so far to take advantage of the scheme.