Loan finance providers

Voluntary and community organisations have often faced difficulties in applying for funds from commerical and high street banks because of their lack of security or track record. This is particularly the case where organisations are newly established or are based within disadvantaged communities.

However, a number of providers now recognise this and are providing loan finance and other sources of income to the Third Sector. These loan providers understand the need for good financial return but also consider social, ethical and environmental concerns as equally important.

Various providers offer different levels of finance, each with their own specific criteria and rates of repayment. Below is a selection of some of these providers in Wales and across the UK. It is advisable that voluntary and community organisations contact these providers direct to discuss their individual requirements.

WCVA’s Communities Investment Fund

The Communities Investment Fund is a new source of financial assistance to help social enterprises and voluntary and community organisations access a flexible loan funding package. Launched by WCVA in collaboration with Development Trusts Association Wales and Wales Co-operative Centre the fund helps build the sustainability of organisations benefiting Communities First Objective One areas. The maximum amount that can be borrowed is £250,000. The fund is also supported by development grant assistance which is aimed at helping organisation towards loan readiness or to help them improve their business skills. For further details please visit www.wcva.org.uk/grants or email enquiries@communitiesfirst.info

Finance Wales

In Wales, Finance Wales operate a Community Loan Fund. Loans of between £5,000 and £50,000 are available to schemes that benefit the community and that can demonstrate that other funding options have been explored. Funding is available for a wide range of activities. For further details visit www.financewales.co.uk or email info@financewales.co.uk

BIGinvest

Is a large loan set up by The Big Issue. It works with social enterprises and the income-generating activities of registered charities. Financing is available for commercial property renovation or purchase, equipment, growth or acquisition and working capital. For further details visit www.biginvest.co.uk or email enquiries@biginvest.co.uk

Venturesome

A Charities Aid Foundation initiative providing unsecured loans and investment support to charities and social enterprises. Venturesome supports investment in property or asset-based projects, income generating ideas and working capital needs. It offers a range of financing from about £25,000 to £125,000. Interest rates on loans are typically 5-6% over no more than 3-5 years. For further details visit www.cafonline.org

Charity Bank

Is unique being both a charity and a bank. It works to create a sustainable, alternative finance market. It provides loans to a wide range of charitable and social enterprise activities. Loan amounts are between £2,000 and £250,000, generally for periods from three months to ten years. Also provides small ‘First Step’ loans up to £10,000 for short terms on a fixed price basis. For further details visit www.charitybank.org

Unity Group

A specialist bank for charities, voluntary organisations and social enterprises. An extensive range of flexible funding packages including property development funding, fundraising bridging loans, social mortgages and grant bridging overdrafts. For further details visit www.unitygroup.co.uk or email us@unitygroup.co.uk

Triodos Bank

One of Europe’s leading social banks. It provides loans to social enterprises and charities specifically committed to projects contributing a social, environmental and cultural benefit to the community. The amounts available are between £20,000 and £10 million for up to 25 years. For further details visit www.triodos.co.uk

Co-operative & Community Finance

Provides loan finance for co-operatives, employee owned businesses and social enterprises throughout the UK. Loans between £5,000 and £50,000 are normally available. They are loans on property or business purchase, loans for capital equipment and working capital and loans to replace inappropriate existing finance. There is no set lending term, however the maximum is usually ten years. For further details visit www.icof.co.uk or email info@co-opandcommunityfinance.coop

Esmee Fairbairn Foundation

The programme is a pilot to help extend support beyond grants, and to learn more about the demand for loan finance in the voluntary sector. The minimum loan is £10,000 and the maximum £250,000. For further details visit www.esmeefairbairn.org.uk/loans.html

Co-operative Action Loan Fund

Provides loans of between £5,000 and £50,000 to co-operative, mutual and social enterprises. All organisations applying for a loan must be able to generate a profit from which they can repay the loan. They award loans to set up or expand a co-operative, mutual or social enterprise, support employee or community buyouts, buy capital equipment or property, working capital, cover delayed grants or to run feasibility studies. For further details visit www.cooperativeaction.coop

Community Development Finance Institutions (CDFIs)

Community development finance is the provision of loans and shares to communities that mainstream financial providers cannot or will not assist. It is a relatively new and growing area and can provide capital and business support to those organisations that are often refused credit elsewhere. This includes many voluntary and community organisations, particularly those working in disadvantaged communities. The Community Development Finance Association is the trade association for CDFIs. It's website includes a directory of CDFIs that are registered members. For further details visit www.cdfa.org.uk