Charities, social enterprises and small businesses affected by the coronavirus crisis can apply for a total of £100m in loans as part of a programme launched by a group of social investors.
The programme of loans, organised by the Impact Investing Institute, Big Society Capital and the Social Investment Business, is designed to ease cash-flow problems and income disruption caused by the pandemic.
The scheme includes a Resilience and Recovery Loan Fund, managed by the Social Investment Business and funded through an initial investment of £25m from Big Society Capital, which will provide emergency loans to affected social enterprises and charities without requiring personal guarantees and charging no fees or interest for 12 months.
Smaller, emergency loans will also be made available on the same no-fee, no-interest-for-12-months basis to small businesses and social enterprises in more deprived areas through a £29m investment in a fund delivered through the Black Country Reinvestment Society, the Business Enterprise Fund, Finance for Enterprise and First Enterprise.
Big Society Capital will reprioritise and repurpose another £50m to address emerging funding needs among social enterprises and charities, either through the Resilience and Recovery Loan Fund or alternative funding vehicles.
The money from Big Society Capital will be drawn from repurposing existing investments and rescheduling planned commitments for future years, and from the Department for Digital, Culture, Media & Sport accelerating the release of previously committed money from dormant bank accounts. Big Society Capital said it aimed to gain further support from other investors.
Big Society Capital’s chief investment officer, Jeremy Rogers, said that, although many charities needed emergency grants to get through the crisis, “others tell us they need loans and investment to continue to deliver crucial services to those most in need”.
He said: “We are therefore doing everything we can to adapt our existing funding agreements so that no organisation is making payments it can’t afford and to find new routes to create a level playing field for social enterprises and charities to access the investment best suited to them at this critical time.”
Nick Temple, the chief executive of the SIB, said the organisation hoped “the Resilience and Recovery Loan Fund can be part of the answer to what organisations need to survive these difficult times” and to thrive again afterwards.
The Resilience and Recovery Loan Fund is expected to be open to applications in mid-April, with the first loans completed by the start of May, according to a statement announcing the scheme, and further details will be released this week.