Sheffield-based Key Fund, which has, to date, invested £35m, is looking to give £1m a month over the next five months in grants and loans to charities, voluntary groups, community groups and social entrepreneurs.
Garry Brown, head of investment at Key Fund, said: “We’re asking anyone living in Yorkshire and the Humber who has an idea, or is involved in a group, organisation, enterprise, or community with an enterprising idea, to talk to us.”
The investor is offering a loan and grant combination to help finance new business ideas or existing business growth. Although grants are given at the discretion of Key Fund typically they amount to ten per cent of the loan taken.
Mr Brown said that they were committed to supporting the voluntary, community and social enterprise sector.
He added: “We know how hard it can be to balance the costs of delivering positive impacts in disadvantaged areas with the tight financial realities of balancing the books, which is why we are offering grants alongside our loans.”
All of Key Funds clients have been turned down by mainstream investors because they don’t fit their lending criteria.
But despite Key Fund’s investments being seen as a higher risk on paper, it has acquired an average loss rate of just 4.4 per cent. They say this is down to its relationship-based lending, free from credit scores or blanket rules – with the organisation working hands-on with applicants.
Mr Brown said: “Many people who want to start their own community or social enterprise, or expand and grow an existing one, aren’t aware that there is an alternative to mainstream investors. With us, you don’t need assets or even necessarily experience, you just need a fantastic business idea that benefits society.”
He added that social enterprises, business whose purpose is to benefit society, struggle to gain the confidence of mainstream investors.
“As the sector grows there is increasing interest and plenty of passion, but start-ups and young businesses need support, guidance and investment in order to flourish. That’s where we come in,” said Mr Brown.
The organisation believes community and social enterprises not only reignite local economies, but are best placed to tackle social problems, meeting the demands of the communities they are rooted in.
Mr Brown said: “The sector is uniquely placed to address some of the greatest challenges we face, putting people at the centre and not just focussing on business as usual.”
Key Fund, formed by a group of entrepreneurs from Locality and the Sheffield Community Enterprise Development Unit in 1999 to help South Yorkshire deal with the downturn in the steel and coal industries, has supported over 2,300 organisations.
Its aim is to create and sustain jobs, invest in disadvantaged areas, and support and sustain social enterprises.
Doncaster Refurnish indebted to institution that understands the sector
One of Key Fund’s first and longest standing clients, Doncaster Refurnish, is going from strength to strength.
Following the aftermath of pit closures, the disadvantaged area needed help to pull itself out of the mire. Twelve years after opening its doors Doncaster Refurnish now has a turnover of £1m, with 43 staff and 40 volunteers.
Along the way Key Fund has delivered eight different finance packages, to the business, to support feasibility studies, business plans and tender packs. Recently, Key Fund gave a £40,000 loan and a £40,000 grant to support the opening of a new furniture retail outlet in a highly disadvantaged and geographically isolated area of Doncaster.
Andy Simpson, CEO of Refurnish, said: “The Key Fund delivers. It always has done. There are lots of funding institutions out there that make promises, that talk a good story and shine in the eyes of the powers that be, but none deliver like the Key Fund.
“The Key Fund truly understands our sector, it lives and breathes it, it believes in what we strive to achieve.”
He added that Key Fund listened with their hearts and their heads. Refurnish collects, restores and sells furniture to low-income families. It works to alleviate poverty, as well as benefit the environment. It offers employment and training to those on the margins of their local community, and rehabilitation and integration opportunities for prisoners due for release from Hatfield Prison.