Local groups needing an extra boost to set up or grow a community business can access support and match funding to launch their share offer, thanks to the Community Shares Booster programme, which reopens today.
Community shares is a popular approach to raising finance, in which local people invest often small sums of money and become co-owners of vital local enterprises – from affordable housing to community pubs to green energy.
A new £3m injection into the programme will support groups in England seeking to launch community shares offers, potentially boost their investment raise and provide ongoing support following their offer.
The first development grants and equity investments will be awarded from early 2018 as part of this five-year programme, delivered by the Community Shares Unit, a joint initiative between Co-operatives UK and Locality, and funded by Power to Change, the independent trust supporting community businesses in England.
Successful applicants could receive a business development support grant up to £10,000 in advance of launching their community share offer. After that, their organisation could have access to up to £100,000 match funding when the share offer goes live. Match funding will be in the form of equity held on equal terms with other community shareholders.
The original £1 million Community Shares Booster Programme Pilot, which began in 2016, supported 15 community businesses. Local people were able to restore a Stretford Hall, a grade 2 Iisted Victorian ballroom in Manchester, build a new green-build straw-bale roundhouse in South Derbyshire, expand a community farm in London, build community-developed homes in Leeds and save the 122-year-old Shotley railway pier for community use in Suffolk.
Simon Borkin, programme lead at Co-operatives UK, said: “We believe the community shares market still has the potential for further growth and the booster programme will provide a welcome stimulus to community businesses considering raising this form of socially-aligned and patient finance.
“We have already invested alongside as many as 3,000 investors and look forward to supporting many more offers through this scheme.”
Tony Armstrong, CEO of Locality, added: “Community shares harness the power and spirit of enterprise in communities – showing the power of community action to financially support great ideas and inspirational projects.
“We welcome this new investment to boost community shares so that more people can come together to develop new projects, benefit local economies and thriving communities.”
And Ged Devlin, programme manager at power to change, said: “Around a third of Community Shares Booster awards to date have been made to groups located in the 10% most deprived communities as identified by the Index of Multiple Deprivation and we are confident the programme has engaged groups which, but for this support, would not have considered issuing a share offer. We are looking forward to supporting more disadvantaged groups and help put businesses into community ownership.”
To date, the programme has supported 15 community businesses, awarding over £100,000 in development grants allowing them to develop their share offer, as well as investing over £600,000 in 11 community businesses as matched equity investments, releasing as much as £1.5 million into the community business market.