Startup accelerators are mushrooming all over Europe, but generally in capital cities.

An exception to that rule is the new Oxygen Accelerator, a Birmingham, UK, based investment programme which recently launched.

The 13-week programme will take applications from around the world and has attracted slightly bemused attention for offering an “evergreen soft loan” of £20,000 to start with, in return for a 6% equity stake. But teams don’t need to ‘pay back’ the loan until the startup raises more investment or the business can afford to repay it. After which that £20k is designed to re-circulate back into the programme and keep £200,000 fund, which covers 10 teams, re-circulating for the next year. Word on the streets say VCs are comfortable with the arrangement, so long as the programme creates dealflow.

The move attracted some controversy, but it’s the brainchild of local entrepreneur Mark Hales, who is passionate about bringin startups to Central England.

I caught up with up to chat about the thinking behind Oxygen. Applications for the programme close in the next few days.