Letter: Charities need the same access to loans as small businesses

This month, the British government’s lifesaving program offering state-guaranteed loans to small businesses is operational for two more years (Big Read, August 9). This is very good news and will make a big difference in getting funding to communities across the UK that are struggling to get it.

It is essential that this essential support is not limited to businesses, but is also accessible to charities. The need for charities has skyrocketed with the cost of living crisis and the UK is facing levels of economic inequality not seen in decades. However, charities that derive less than 50% of their income from trade will not be able to access the program after Christmas. We also encourage the government to work towards a longer-term engagement to enable companies and investors to plan for the long term.

Social Investment Business, a UK charity and trading company which provides loans, grants and other financial products to charities and social enterprises, has raised £46.5million in funds backed by the Government Guarantee which has so far now provided loans to 95 social enterprises and charities that have struggled to access funding from traditional banks. These loans have already had a significant impact, benefiting communities across the UK, from a charity providing digital skills training to tens of thousands more people, to a charity finding housing and training for the homeless.

We urge the government to make the necessary policy changes well in time for Christmas, so that charities do not find themselves in the unenviable position of being excluded from the program on January 1st. Using the specialist expertise of social impact investors, we are confident that not only will these loans continue to be repaid, but they will also continue to create jobs, spur growth and help people struggling with cost of living crisis.

Sarah Gordon
Managing Director, Impact Investing Institute

Stephen Muer
Managing Director, Big Society Capital

Nick Temple
Managing Director, Social Investment Enterprise

Theodora Hadjimichael
Managing Director, Responsible Finance

Alastair Davis
Managing Director, Social Investment Scotland

Frank Sanderson
President, Social Investment Forum

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