LENDERS LINK BID SCRAPPED; BUSINESS EDITOR.
BID SCRAPPED MONTHS of merger talks between specialist lenders Aston Reinvestment Trust and the Black Country Reinvestment Society have collapsed due to fears over future funding. The proposed link-up, which would have brought together two organisations which lent a total of PS4.4 million in 2012, has been called off due to potential complications arising from funding and taxation issues. The failure of the merger discussions was subsequently described as 'very disappointing' by ART chairman Craig Errington. ART and BCRS make loans of up to PS100,000 to businesses unable to obtain all their requirements from the commercial banking sector. ART has over 300 members and BCRS 42. The combined organisations have a track record of 25 years of lending to local small businesses and social enterprises and announced merger discussions just before Christmas. Both ART and BCRS recently received a commitment of substantial funding from Round One of the Government's Regional Growth Fund for lending to small businesses over the next three years. But uncertainties have arisen as to how a combined organisation would have funds allocated over the three-year period, with the potential threat of reduced funding. Community Investment Tax Relief (CITR), which offers member investors 5 per cent tax relief on investments made in ART or BCRS, was also under threat with the possible loss of CITR accreditation if both organisations merged. Craig Errington, chairman of the ART Board and chief executive of Wesleyan Assurance, said: "It is very disappointing to have merger discussions come to a halt at this stage but the timescale for resolving funding and taxation issues has blocked an early merger. Both the Boards of ART and BCRS have worked well together and will continue to do so in the future." BCRS chairman Stephen Karle said concluding merger discussions was 'the right thing to do at this stage".