Blended – part grant, part loan
A package of funding that is a mixture of investment, that needs to be repaid and a grant that doesn’t need to be repaid. For example, a grant of £20,000 alongside a loan of £50,000 that needs to be repaid over 5 years with 10% interest.
A tradable loan from a group of social investors to a charity or social enterprise over a fixed period of time with a fixed rate of interest. For example, if you issued a £2million bond over 5 years at 2% interest in 2017, you would pay the social investors £40,000 interest each year and repay the £2million in 2022.
Community Investment Enterprise Facility (CIEF)
Community Investment Enterprise Facility (CIEF) provides debt finance to Community Development Finance Institutions (CDFIs).
CIEF was established by Big Society Capital, is managed by Social Investment Scotland and delivered on a local level. Find out more here.
A withdrawable, non-transferrable equity investment into a cooperative or community benefit society. It is a form of equity because the investors get a share of the organisation.
Coronavirus Business Interruption Loan Scheme (CBILS)
The Coronavirus Business Interruption Loan Scheme (CBILS) is a Government scheme that provides financial support to smaller businesses affected by coronavirus (COVID-19).
The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million. The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.
There are some social investors that provide finance via this scheme. Find out more about the scheme here.
An investment that is raised via an online platform and not secured against an asset (a building or equipment). A ‘crowd’ of individual investors put (mostly) small amounts towards a loan to your organisation and you repay it on an agreed basis, usually with interest on top.
During the COVID-19 crisis, many social investors have adapteded their approach to better support frontline organisations.
The organisations are doing one or more of the following:
- Providing additional support
- Taking on new investees
- Responding to inquiries within 4-6 weeks
They can be found by the orange exclamation mark next to their profile in our directory.
An investment in exchange for shares in your organisation. For example, an investor pays £10,000 to own 10% of your organisation. Equity investors receive a share of any profits paid out by your organisation and get to have a say in how it is run, proportionate to the amount they invest.
An investment that reflects some of the characteristics of shares but without your organisation offering up equity. Rather than paying back a set amount each month, your repayments are typically based on the performance of the organisation – such as profits or income. For example, you receive an investment of £50,000 and agree to pay the investor 2% of your annual income for 5 years.
Resilience and Recovery Loan Fund (RRLF)
The Resilience and Recovery Loan Fund (RRLF) is a new fund for social enterprises and charities who are, as a result of COVID-19, experiencing disruptions.
For many organisations who have lost income, grants will be most appropriate, but in some cases where there is an additional cash flow need (for example where expected future payments are delayed) loans may be appropriate. Established by Social Investment Business with support from Big Society Capital, the RRLF will be delivered initially by three social investors.
An investment that works like a mortgage on a house. An investor provides your organisation with a loan against an asset (often a building or equipment) as ‘collateral’. Alternatively, an organisation's parent company may offer its shares in the organisation as the collateral. You repay the loan on an agreed basis (e.g. regular monthly payments) usually with interest on top.
Social Impact Bonds
A Social Impact Bond (SIB) is a payment-by-results contract where social investors pay for your organisation to deliver a service – for example, helping homeless people to find a home – and the Government repays the investors with interest if the service is successful.
Social Investment Tax Relief
Social Investment Tax Relief is a tool that can be used in combination with other products.
A tax break for individual investors into charities and social enterprises. Investors get 30% of the cost of their investment off their next income tax bill so, provided certain conditions are met, if an investor makes a £100 investment into your organisation, they can claim £30 back. Investors can’t sell their shares or have their loan repaid for 3 years, although they can receive interest on loans.
Social property funds
Funds managed by a specialist firm, who raise money from investors, and then use the funds to buy property that can be used by a charity to deliver its services. The charity leases the property from the social property fund.
Unsecured loan (incl. overdrafts)
An investment that is not secured against an asset (a building or equipment). An investor provides your organisation with a loan and you repay it on an agreed basis, usually with an agreed amount of interest on top.