Resilience and Recovery Loan Fund

Challenge

The impact of the coronavirus pandemic is being felt acutely by charities and social enterprises. It is predicted that charities alone could miss out on more than £4 billion of income in the 12-week period following the introduction of the Government measures to halt the spread of the virus. A number of organisations may be unable to operate, face making redundancies or may be threatened with collapse.

Tackling a challenge of this scale requires a combined effort and a broad package of grants and business support. For some social enterprises and charities facing cash flow issues and disruption to their trading, repayable finance could help them deliver crucial services at a time when they are needed most.

However, a number of organisations are unable to access emergency repayable finance from the main government-backed Coronavirus Business Interruption Loan Scheme.

Approach

For those organisations requiring loans and investment, Better Society Capital has worked with social investors and the Department for Digital, Culture, Media and Sport (DCMS) to create a £100 million emergency response. The measures include a new £25 million Resilience and Recovery Loan Fund, alongside changes to the Community Investment Enterprise Facility (CIEF) to allows loans under the Coronavirus Business Interruption Loan Scheme and the repurposing of up to £50 million of existing capital.

Fund

The Resilience and Recovery Loan Fund, managed by Social Investment Business (SIB), enables social lenders to provide emergency loans to social enterprises and charities that are experiencing disruption as a result of COVID-19. Loans can be used to provide working capital until normal business resumes, cover delays in trade payments, or meet the increased demand for services, without requiring personal guarantees and charging no fees or interest for 12 months. Better Society Capital has provided an initial £25 million in funds, with loans backed by the Government’s existing Coronavirus Business Interruption Loan Scheme and issued through SIB working with Big Issue Invest, CAF Venturesome, Charity Bank, Resonance, Social Investment Scotland, Social and Sustainable Capital and Wales Council for Voluntary Action.

• Fund size

  £25 million

• Better Society Capital commitment

  £25 million