Commercial & High Street Lenders
Commercial Loans
There are a number of organisations that specifically lend to social enterprises such as community shops. These are often referred to as ‘Community Development Finance Institutions’ or CDFIs.
If you feel this is a route that is needed for initial financial outlay it may be worth tasking a member of your team to research the options available and ensure the best terms are achieved.
Here are some examples of lenders:
UK Community Foundations
www.ukcommunityfoundations.org
Offering a series of funds available across the UK to support small charities and community projects with loans of up to £4,000.00.
Triodos Bank
Regarded as one of the leading sustainable banks, supporting businesses in the community development sector. Their belief is that banking can be a catalyst for making greater social and environmental impact.
Charity Bank
Offers alternative funding to business charities and social enterprises not qualifying for mainstream loans. Their community business loans offer funding from £30,000 to £750,000 with flexible terms and repayment holidays including access to sector experts.
Social Investment Business
Provides support for community organisations based in England that are looking to take on their first loan to help growth and sustainability. Particular preference is given to organisations working in sectors covering the elderly, health & well-being, and employment opportunities for young people.
Social and Sustainable
www.socialandsustainable.com/third-sector-loan-fund
Invests between £250,000 and £3 million in charities and social enterprises across the UK. Supports organisations across all social sectors focused on improving the economic and social well-being of individuals, particularly those who are vulnerable and disadvantaged.
High Street Lenders
When considering lending money to a community shop venture, the following will be taken into account by any High Street Bank:
- the financial contribution made from the community itself towards the project
- the quality of the proposed management committee or shop manager
- the historic performance of the shop and anticipated projections
- the potential for the business to be able to repay the loan if the application is successful.
Co-operative Bank
www.co-operativebank.co.uk/business/products/lending
Their overall ethos lends itself to being generally sympathetic towards community ventures. It offers financial aid for the development of cooperatives or employee-owned businesses and social enterprises in the UK for general business needs, including loans on property, business purchase, capital equipment and working capital.
However it may be worthwhile approaching other banks to check out their credentials in terms of community ethos, and also find out what deals are available for new community business ventures.
RBS Social & Community Capital
Charity funded and supported by Royal Bank of Scotland in order to help social enterprises and community businesses. Providing Community Business Loans of £30,000 to £700,000 and expert advice at different stages of business development.
It makes sense to ‘interview’ a number of banking service providers.
You will need a reputable clearing bank for your day to day financial operations for the shop itself so try to establish face-to-face contact at the outset, and find out what their policies are in terms of supporting community projects.
It may not just be a case of your financial ‘lead’ setting up a bank account, so take along a member of your team who can share the ethos and enthusiasm of your community shop at the initial meeting.
