COMMUNITIES could soon find themselves helping local entrepreneurs raise capital for business buy-outs thanks to York’s first crowd funding platform.

With corporate bank lending slow to pick up, crowd funding has become a popular way for businesses to secure money.

By putting their business plans in the public domain, firms hope to tempt investors to part with their cash either on a loan basis or in return for equity.

Crowd funding has been used to support a variety of projects, from new businesses and equipment to property development and expansion, but never to actually fund the purchase of a business.

Spotting that gap has led to the creation of Acorn4Finance, born out of York-based finance broker Acorn Commercial Finance.

Acorn partner Tom Thompson said: “As a finance broker I’ve spent almost 30 years looking after people buying businesses, so applying that knowledge and experience to crowd funding made perfect sense.”

Acorn will still underwrite the case, and in many cases obtain bank funding for the majority of the purchase, with Acorn4Finance then used to provide top up funds.

The scheme, which has been set up on a loan basis rather than equity, allows investors to put forward as little as £20 with the hope that those in the local community will support the sale of a business.

Acorn partner Paul Thompson said: “If a business is valued by the local community and provides them with an amenity then why not get the locals behind it to assist with the funding?

“Lenders can set their own interest rate depending on how much risk they would like to take. Once the loan is made, the borrowers monthly payments are divided to all the lenders who are paid back over the term of the loan.

“We’re very excited about being able to fund a wider variety of businesses than ever before using Acorn4Finance and we have already got the first few cases ready to go.”

Acorn Commercial Finance was formed in 1997 and is a partnership of Tom and Paul, a father and son team.