A new Kent-based loans firm hoping to get businesses growing by offering cheaper interest than the major high street banks has a charitable cause at heart.

Chris Price caught up with Spark founder and chief executive Paul Norley.

The eureka moment for Paul Norley came when he was watching TV at his Maidstone home.

A Channel 4 documentary called Bank of Dave highlighted the work of a Burnley man, David Fishwick, who decided to set up a loans company to help reputable small businesses and people struggling to get credit in his community.

“I watched the programme and thought it could be applied anywhere,” said Paul, whose loans company Spark launched last month.

The new peer to peer lender is aimed strictly at businesses and plans to kickstart the county’s economy by getting money moving again.

Paul said: “It’s a step back to traditional banking, when a bank manager was a man of the community.

“By borrowing and buying a computer, a business can help the kids’ club down the road...” - Spark founder Paul Norley

“He knows small businessmen and makes decisions based on talking to people rather than pressing a button on a computer.”

The problem Paul faces with his business venture is simple – getting lenders to sign up.

He wants to get 1,000 people to agree to lend money to businesses through his firm, in the same style of companies like Zopa, which have become successful nationwide.

Spark will lend at a flat rate of 12% and offer a fixed 5% (AER) return on savings to lenders.

Paul, 43, said: “We have had lots of interest but not enough people are committing. People have never heard of Spark but for some reason they are still happy to put money in Lloyds or RBS despite their history.

“We want people to take baby steps. Put in £250. It’s guaranteed to the hilts. They won’t get a massive cheque at the end of the year but they can see it working.”

Paul believes his business model gives all lenders complete security with their money. Each firm to borrow from Spark will become a limited company, with assets used to secure the loans.

If that goes wrong, Spark’s parent company will guarantee the loan, followed by a personal guarantee from Paul and, in the worst-case scenario, a £500,000 life insurance policy.

“Hopefully the life insurance is never called on,” said Paul. “There’s no risk. That’s the beauty of it. It’s 100% guaranteed.”

An accountant for 25 years, Paul will operate his company from his Maidstone home and from an office in Canterbury.

There is an altruistic motive behind setting up the business as well. The father-of-four founded the charity Helping Hands in 2009 and plans to give all the firm’s profits to good causes.

He said: “I didn’t want to fund the charity through grant funding. You are just taking money from other charities that way. I wanted to generate income commercially to go into that charity.

“The profit on this I will push through Helping Hands which will distribute it to causes which are local to the client.

“By borrowing and buying a computer, a business can help the kids’ club down the road.”

He added: “I have got everything I want. Don’t get me wrong, I would love to win the lottery but I think there are a lot of people out there who don’t have what I take for granted.

“The business is not going to make the slightest change to my family. As long as my level of income doesn’t go down, all the money will go to charity.

“If we can make a difference then I will be happy.”

Next year, Paul hopes to launch the second phase of Spark competing against short-term lenders, something he feels strongly about.

He said: “Because there’s a need, there’s an opportunity for greed. One per cent APR a day is wrong.

“Pay-day lenders shouldn’t be making so much money that they sponsor football teams and TV shows, with friendly cartoon characters advertising them which have no relevance to the product.”

He acknowledges lending to people will carry a higher rate of interest than to businesses but says the same bank manager ethos will be used when giving out loans.

He pledges Spark will also charge significantly less interest.

He said: “We will turn a lot of people away. We won’t lend to everyone. It will be to people who can pay and we will look for guarantors.”

Details at www.sparksal.co.uk.