PKPaul KiltyLast checked 13 October 20268 min read
If you run a social enterprise and want to grow, most of the money out there is repayable: a loan, or part loan and part grant. The hard part is often getting ready to take it on, and there’s help for that too.
The four funds below take you through it in order, from growing your trading to your first loan. All four are open now, and the first closes at noon on 6 November. After them, you’ll find what lenders look for and the terms you’ll meet along the way.
The short version
Growth money is usually repayable: a loan, or part loan and part grant.
Lenders such as Big Issue Invest want repayments to come from what you earn, not from grants.
If an investor is interested but you’re not quite ready, there’s grant money to close the gap.
Want to know how many open funds your social enterprise could apply for?
1
Grow your trading
Social Investment Gateway Programme
School for Social Entrepreneurs
ProgrammeGrant up to £18,000, or £24,000 repayableEnglandCloses 6 November
A free 12-month programme to grow your trading and get ready for social investment, with a choice of one grant: a Match Trading grant of up to £18,000, drawn down in five instalments over 12 months, or a repayable grant of up to £24,000, where you keep 25% and repay 75% over two to three years. Repayable grants are a pilot, with 10 places.
Skip it if your income is under £100,000 and you don’t yet have a strong trading model, or you aren’t planning to raise social investment in the next three years or so. Applications close at noon on Friday 6 November.
Pays for the business plan, forecasts or governance work a social investor needs before they can make you an offer. You’ll need to be looking to raise the investment within six to twelve months.
Skip it if no investor has shown interest yet. You apply through an approved Access Point, not direct.
Investment£50,000 to £300,000Great BritainFour rounds a year
Half grant, half loan, with the loan at 3% over one to seven years and no arrangement fees. It’s for asset-locked organisations in Great Britain whose work fits one of the Trust’s four themes: Thriving Together, Bright Futures, Sustainable Planet or Resilient Communities.
Skip it if you can’t draw the money down within three months of a decision, or you don’t have an asset lock.
Investment£20,000 to £4 millionEngland, or UK-wide over £200kRolling
Loans for organisations that are already trading and have a track record of impact. Rates typically start at 7%, and it begins with a conversation about what you need.
Skip it if you’ve been trading for less than two years, or repayments would have to come from grants rather than what you earn.
A loan works when the money helps you earn more, or spend less, than it costs to repay. Taking on a building, buying equipment or growing a service people pay for can all fit. Using a loan to fill the gap when a grant ends is much harder to pay back.
Four questions to ask before you start:
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Will this money pay for itself?
Over the life of the loan, it should bring in or save more than it costs.
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Can you repay from what you earn?
Big Issue Invest, for one, needs repayments to come from traded income, not grants.
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How long have you been trading?
Some lenders want a track record. Big Issue Invest asks for at least two years.
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Is your mission locked in?
Several social investors, including Postcode Innovation Trust, only invest in asset-locked organisations. CICs have an asset lock by law.
Not sure yet? Good Finance has a free check that takes two or three minutes, plus a directory of social investors and advisers you can filter by area and amount.
What a lender will ask for
Every lender is different, but between them the lenders above ask for all of this.
A business plan
What the money is for, and how it pays back.
Your past accounts
Postcode Innovation Trust asks for historic accounts with a full application.
A forecast for the loan period
Income and spending for every year you’d be repaying.
A board that holds you to account
Big Issue Invest needs at least two directors. The Reach Fund asks for two independent ones.
A way to show your impact
You’ll keep reporting it. Postcode Innovation Trust asks twice a year.
If an investor likes your plan but needs more of this before making an offer, that’s exactly the work the Reach Fund pays for.
Key terms explained
Social investment has its own language. These are the terms that come up most.
Secured loan
Backed by property or other assets you own. Usually cheaper, because the lender takes less risk.
Unsecured loan
No claim on your assets. The lender takes more risk, so interest is usually higher.
Blended finance
Part loan, part grant, like Postcode Innovation Trust’s half and half packages.
Revenue participation
Money up front, repaid as an agreed share of future income instead of fixed repayments.
Community shares
Shares your community can buy and later withdraw. Only co-operatives and community or charitable benefit societies can issue them.
Asset lock
A rule that stops your assets being handed out to members or owners. Many social investors require one.
Each of these covers one part of the UK. Loans start at £1,000 in Wales, and London’s fund has lent up to £3 million so far.
Key Fund
North of England and Midlands · £5k to £300k
Social Investment Fund for London
London · £50k to £3m so far, usually five to ten years
Scottish Social Growth Fund
Scotland · £100k to £500k, up to 14 years
Wales Micro Loan Fund
Wales · £1k to £50k, up to ten years
Questions people ask
Can a CIC get social investment?
Yes. The Reach Fund’s application guidance lists CICs limited by guarantee and by shares among its legal forms, and counts a CIC’s asset lock. Postcode Innovation Trust takes CICs limited by guarantee, and CICs limited by shares that can’t pay dividends to individuals. Big Issue Invest lends to incorporated organisations with a clear social purpose.
Do we need to be a registered charity?
No. Big Issue Invest says outright that you don’t need charitable status, SSE’s programme is for charities, social enterprises and community organisations, and the Reach Fund and Postcode Innovation Trust both accept CICs.
How much does a social loan cost?
It depends on the lender and the risk. Postcode Innovation Trust charges 3% on its loan half. Big Issue Invest says its rates typically start at 7%. Good Finance has a calculator to compare the true cost.
What if we’re not ready yet?
Start the conversation anyway. Reach, Postcode Innovation Trust and Big Issue Invest all begin with an enquiry or a chat, not a full application. If an investor wants more from you first, the Reach Fund can pay for that work.
See which of these fit your organisation
Answer four questions and we’ll check every open fund on Shoots, these four included.