Leading social investors have announced measures that will create new routes for social enterprises, charities and small businesses to obtain urgent finance. Eligible organisations should be able to apply for the emergency loans and investment without paying any loan arrangement fees or interest for 12 months. The application process is hoped to launch in April, with the first loans being delivered in early May.
The measures include:
A Resilience and Recovery Loan Fund to be managed by Social Investment Business ('SIB'). Loans will be backed by the Government's Coronavirus Business Interruption Loan Scheme ('CBIL') and issued by SIB. The loans will not require personal guarantees and no fees or interest will be charged for 12 months. Big Society Capital has provided initial investment of £25 million and other social investors are being asked to supplement this.
By ensuring that the Community Investment Enterprise Facility can access the CBIL scheme, smaller emergency loans will also be made available to small businesses and social enterprises in more deprived areas, on the same basis, so no fees or interest will be charged for 12 months. BCRS Business Loans Limited, Business Enterprise Fund, Finance for Enterprise and First Enterprise will deliver the loans.
Big Society Capital has committed to repurposing and reprioritising up to £50 million to address emerging funding needs.
Big Society Capital is partly funded by the release of funds in dormant bank accounts by the Government, and the Department for Digital, Culture, Media and Sport has accelerated the release of previously committed dormant bank accounts in order to enable the initiative.