Social lending

Extending our reach

Across the UK, thousands of organisations struggle to access the finance they need to sustain and grow their businesses, due to certain key groups being overlooked, leading to under-representation. Therefore, as part of our 2025 strategy, we will work with partners to understand the key areas we may be missing, and to identify where we need to go further.

Levelling up

Small businesses play an important role in society, by creating and sustaining jobs for local people and supporting local economic activity. This is especially true in left-behind communities, which have been the hardest hit by the Covid pandemic. Yet many sustainable small businesses in these communities cannot access mainstream finance and remain underserved. Community Development Finance Institutions (CDFIs) are one solution to this problem, and have a social mission to serve these groups. The Community Investment Enterprise Facility (CIEF), managed by Social Investment Scotland (SIS), supports four CDFIs, which have now channelled £48.5 million into 686 enterprises in communities across the Midlands and Yorkshire, and continue to make impact within left-behind communities. Our £30 million commitment to this facility has been fully matched by social banks, Triodos and Unity Trust.

Resilience and recovery

In 2020, when the pandemic first hit, there was a real concern that social enterprises and charities could fall through the gaps in government support. In partnership with Social Investment Business (SIB) and other partners, we created the Resilience and Recovery Loan Fund (RRLF) in 2020. This fund was to help ensure social enterprises and charities could access the Coronavirus Business Interruption Loan Scheme (CBILS), to provide crucial working capital to help organisations maintain financial resilience, save jobs, and allow the continuation of vital services.

To date, the fund has distributed a total of £28 million to 77 social enterprises and charities, (£24.2 million in loans and £3.9 million in grants) and helped secure over 9,000 jobs. At the 2021 UK Social Enterprise Awards, the fund won Social Investment Deal of the Year, with the judges commenting, “There are businesses that might not be here today without the speedy, affordable support provided by this deal.”

Continuing upon the success of the RRLF, in 2021 we committed £15 million to the Recovery Loan Fund (RLF) managed by SIB, which benefits from the Government’s Recovery Loan Scheme (RLS).

We have focused on other interventions and enabling activities that underpin building resilience through recovery, including investment via Resonance Community Developers, a social impact fund, which has an innovative approach to blending resources and capital to create strong assets at the heart of communities around the UK.

The Access Growth Fund

The fund offers unsecured loans and grants of up to £150,000 to social purpose organisations. Five years later, Ecorys, the evaluation partner, conducted an independent evaluation of the programme (using data collected up to September 2020), which included the following:

• Since 2015, 600 grants and loans have been deployed by 14 different social investors, amounting to £40.3 million.
• The grant blended with repayable investment has made it possible for smaller loans to be provided to smaller-scale organisations, compared with the rest of the social investment market.
• Organisations accessing investment from the Access Growth Fund are on average half the size (median income of £220,000) and have an eighth of the asset base of those accessing other forms of social investment.
• 26% of all investments, by number, were to social purpose organisations operating in the 10% most deprived areas in the UK.