Co-operatives can apply for loans and equity investments of £250,000 to £1m from a new investment fund.
The Community Investment Fund is a joint initiative from the Social Investment Business Group and Social and Sustainable Capital (SASC), which both provide loans to charities and social enterprises. The fund was designed to help improve the quality of life of local individuals and enhance community engagement and cohesion by empowering people to develop locally determined solutions.
The enterprises targeted by the fund are community-led social sector organisations from England and Wales, which have a social impact. They could be providing health and social care, education, training and employment support or children’s services.
To be eligible for funding, organisations need to demonstrate clear social objectives within their constitutional documentation and show that appropriate asset locks and remuneration policies are in place.
Benjamin Rick, managing partner and co-founder of SASC, said: “We are delighted to announce the launch of the Community Investment Fund, responding to specific requirements of charities, co-operatives and social enterprises.
“The fund has been designed to allow for substantial individual investments into the best social organisations seeking to create positive change in their communities.”
The Localism Act allows community groups, including social ventures, to bid to run local services and save important local assets by taking them into community ownership, a process known as community asset transfer.
SASC believes the Act has the potential to encourage people to set up new social ventures. However, as they develop, community enterprises are likely to require finance to purchase buildings or provide working capital to increase their capacity to deliver services. By providing funding through both debt and equity, the fund aims to help address this funding gap and help enterprises boost growth and productivity, not only financially, but also in relation to their social impact.
The Community Investment Fund expects to invest £5m a year in community-based and locally led charities and social enterprises, including co-operatives. It will target a 5% internal rate of return (IRR), net of fees and expenses.
• To find out more, visit: socialandsustainable.com/community-investment-fund