Classic motorbike manufacturer Norton yesterday became the first company to benefit from the Government's scheme to boost small business exports and underpin Britain's return to economic health.
The 113-year-old Leicestershire-based firm will receive a £625,000 loan under the Exports Enterprise Finance Guarantee Scheme (ExEFG) that will help it expand its factory and double its workforce to 60 full-time staff by next year.
The Business Secretary, Vince Cable, who announced the loan at a visit to Norton's Donington Park factory, said the programme was central to the Government's vision for the economy.
"Trade and investment are essential to driving our economy, and encouraging small businesses to export more is at the heart of that," he said.
"This iconic company, whose brand once inspired a generation of motorcycle enthusiasts, is a prime example of British business innovation."
Stuart Garner, Norton chief executive, said the injection of funds would be the key to meeting the demands of "an ever-increasing international customer base".
He added: "This scheme will not only benefit Norton and the local area, by supporting enterprising firms across the country it will help drive forward the British economy."
Under the ExEFG programme, set up in April, six high street banks will offer export finance facilities of between £25,001 and £1m for up to two years to small- and medium-sized companies with a turnover of up to £25m. The scheme is designed to underpin a recovery led by exports, small businesses and manufacturing as part of wider ambitions to "rebalance" the economy away from a perceived over-reliance on financial services.
The announcement of Norton as the first successful applicant came ahead of financial results from Lloyds Banking Group and Royal Bank of Scotland later this week that are expected to show only patchy progress towards small business lending targets agreed as part of the Government's Project Merlin.
Bank of England figures released on Friday showed lending to private, non-financial companies is continuing to fall, reigniting controversy over whether the banks are doing enough to kickstart economic growth in the wake of the financial crisis.
Steve Pateman, head of corporate, commercial and business banking at Santander – which is funding the Norton loan – said the ExEFG scheme would help to spread finance wider.
"Schemes like this are invaluable for being able to get smaller exporters at the margins of commercial lending criteria, like Norton, the finance they need if they are to drive international trade and regional economic growth," Mr Pateman said. The Norton loan follows last week's announcement of government support for Westland in bidding for Britain's first civilian helicopter contract for 40 years.
Mr Cable has agreed a £22m loan, plus another £10m in R&D grants, to help build the new AW169 aircraft.
Supporters of British manufacturing welcomed the news as a boost to the sector.
But it also sparked controversy, given the Coalition's cancellation of an £80m loan to Sheffield Forgemasters agreed by the Labour Government before last year's general election.
The heavy engineering group subsequently applied for funding through the £1.4bn Regional Growth Fund, it emerged last week.
On the road again
* Set up by James Lansdowne "Pa" Norton in Birmingham in 1898, the original Norton Motorcycles was a maker andsupplier of parts. But by 1908, Norton was making the entire motorbike, and has done so ever since – with two iconic bikes, the Model 16h and the Big4, playing a key role in the British war effort, and others winning the Isle of Man TT race during the 1940s and 1950s.
Norton suffered in the industrialconfusion of the 1970s, buffeted by declining sales and incoherent government policies that saw a string of forced mergers, bail-outs and withdrawals.
After a string of owners and stop-start production that still produced one TT-winning model in the 1990s, the current chief executive, Stuart Garner, bought the Norton brand from its US owners in 2008 and relaunched the company with a factory at Donington Park.Reuse content