In light of the coronavirus crisis, we are looking at a number of options to help the sector including exploring new funding and adjusting existing funding. As such, the Growth Fund has announced significant changes to the Fund in response to the pandemic.
These amendments are designed to enable fund managers to provide support to social enterprises and charities in their portfolios and much-needed liquidity to organisations in the sector.
There are over 400 social enterprises and charities that have received investment from the Growth Fund and could now benefit from these new measures.
The measures include:
- A six month interest-free period for the Growth Fund social investors on their loans from Big Society Capital and a term extension; and
- Relaxing of some of the parameters, covenants and reporting requirements of the programme.
These measures will allow for the social investors to have discretion and flexibility to support both existing borrowers as appropriate and provide much needed liquidity into other charities and social enterprises who may need that support.
The Growth Fund recommends that fund managers signpost Voluntary, Community and Social Enterprise (VCSE) organisations in need of emergency liquidity to the new government-backed Coronavirus Business Interruption Loan Scheme in the first instance. We understand this will not work for every VCSE organisation and so are working on ways to expand and connect the scheme to social lenders. In the meantime, and for those not suitable for the scheme, the Growth Fund is open to new borrowers.
Big Society Capital published its initial response to the pandemic on Monday 16th March with an update this week - with its priorities around sharing information, adjusting existing funding and exploring new funding. It is currently in discussion with the Government and other partners about creating an Emergency Liquidity Facility to help with the significant financing needs in the sector. To keep up with funding developments, visit our information page for social investors.