Broadband and telephony services provider KC has backed a £600,000 investment fund for digital and technology sector businesses and entrepreneurs in Hull and East Yorkshire.

Broadband and telephony services provider KC has backed a £600,000 investment fund for digital and technology sector businesses and entrepreneurs in Hull and East Yorkshire.

The fund, to be named KC Invest, will provide growth financing in the form of loans to start-ups or early-stage businesses in the region that want to expand. Loans of between £1,000 and £25,000 with an interest rate of 14 per cent will be available through the fund, and the repayment period will be about three years.

KC Invest will be administered by local enterprise agencies, the Acorn Fund and Sirius, both of which are Community Development Finance Institutions that are able to deliver loans through the European Regional Development Fund.

KC, formerly Kingston Communications, will invest £300,000 in the venture, which will be matched by the ERDF, resulting in £600,000 being made available to local businesses.

Sean Royce, KC’s commercial and finance director, says the fund, which will also provide mentoring services for portfolio companies, is in response to a current squeeze on lending.

Royce comments, ‘The irony is that it’s harder than ever for entrepreneurs to obtain finance, yet we need those new businesses more than ever now to drive growth, employment, and help fuel the economic recovery. That’s why we created KC Invest.

‘Of course our motives are not purely altruistic; creating a vibrant economy will attract additional people, create more businesses and stimulate inward investment to the area, which in turn will benefit us, but importantly will improve the local economy and local lives.’