A new fund, offering grant and unsecured loan finance to social enterprises has been launched across Yorkshire today.
Key Fund, a long-standing investor in community and social enterprises, is delivering the Northern Impact Fund.
The £5.5m fund is aimed at new and early stage enterprises who are seeking finance to support growth. For Key Fund it marks a return to a model of offering a mix of grant and loan.
Matt Smith, CEO of the Key Fund, said: “With this fund we’re offering finance of up to £150,000, but typical investments will be around £50,000, with up to 20 per cent of the amount available as grant.
“The Key Fund was one of the early pioneers in this space, and our original model was based on a grant and loan mix, so we’re really excited to be going back to that original model.
“It’s long been our belief that grants can play a very important role in helping new and smaller social enterprises become more robust.”
The Northern Impact Fund is open to applications from social enterprises operating in the Midlands, North East, North West and Yorkshire.
“We have always believed small organisations can deliver a big impact in disadvantaged communities,” Mr Smith said. “In this current economic climate, we are seeing good businesses struggling and access to finance and support has never been so crucial, so we’re delighted to be delivering the Northern Impact Fund.”
The grant is aimed to help cover the initial costs related to social impact, such as investing in training for young people and staff, as the enterprise gets up and running.
Key Fund has supported hundreds of social enterprises, businesses that put people before profit, for over 15 years.
One of its first grant-loan investments was in Barnsley Community Build, which delivers training and employment in the construction industry for young people and those disadvantaged in the labour market.
It was established in 2001 and with Key Fund’s support, has now evolved into a self-sustaining social enterprise.
It also provides housing for vulnerable adults, and is a social landlord supporting a wide range of charities in Barnsley, as well as running a community café with meals on wheels for the elderly.
Mr Smith said: “Barnsley Community Build is living proof that passion and determination, matched with the right blend of financial support, can and does make a significant difference to the development of sustainable enterprises. Our founding mission is to break down the barriers that hinder the growth of local economies and communities, for a fair society.”
The Northern Impact Fund has received support from the Growth Fund, which is an initiative of Access – the Foundation for Social Investment. The Growth Fund has been designed to increase the availability of small, affordable, unsecured loans for charities and social enterprises.
It totals £45m and provides a blend of loan from Big Society Capital and grant from the Big Lottery Fund, to social investors across England, allowing those social investors to offer smaller loans and take much greater risk than some other lenders are able to.
Seb Elsworth, chief executive of Access, said: “The blend of loan and grant, which we make available to social investors, like the Key Fund, means they can provide smaller loans on affordable terms with appropriate support.
“We are also encouraging the development of partnerships which can help to open access to social investment for more charities and social enterprises to help them to sustain and grow their impact.”
Barnsley Community Build was created by Barnsley Development Agency and Barnsley Metropolitan Borough Council in 2001. It has since evolved into a self-sustaining social enterprise. Steve Palmer, operations manager at Barnsley Community Build, said: “Without the Key Fund support, we’d be finished. They’ve handed us at least two ‘get out of jail’ cards.”