Loans are available to support UK charities and social enterprises who have been impacted by coronavirus/COVID-19 and need funds to help them to survive, recover and grow.

Funding body: Social Investment Business (SIB)
Maximum value: £ 1,500,000
Application deadline: 21/11/2021

The Recovery Loan Fund has been established by Social Investment Business (SIB) to make an existing government guarantee scheme – the Recovery Loan Scheme – more easily accessible to charities and social enterprises in the UK.

The Fund is being managed by SIB, with initial investment from SIB and the Fusion21 Foundation, a social enterprise specialising in public sector procurement. In addition, SIB will work with the following experienced social investor partners to deliver the fund: Big Issue Invest, Charity Bank, Key Fund, Resonance, Social Investment Scotland and Wales Council for Voluntary Action. Other delivery partners may be added in the future.

Objectives of Fund
Loan funding is available to support registered charities and social enterprises impacted by the pandemic and which are working to improve people’s lives, or the environment they live in, across the UK.

All funding purposes will be considered including refinancing of existing debt onto more patient terms.

Value Notes
Loans are available for a term of one to six years in the following sizes:

  • Between £100,000 and £1.5 million.
  • Upwards of £50,000 for BAME-led organisations and those based in Wales and Scotland. (SIB defines BAME-led as having a board or senior management team made up of 51% or more members from BAME backgrounds.)

The scheme offers a capital repayment holiday for up to one year, with regular payments thereafter

Loans will have a fixed interest rate of 7.9% per year. The following arrangement fees will apply: 2.5% on loans of £500,000 or greater; 3% on loans of less than £500,000. There is no penalty for early repayment.

All loans of up to and including £250,000 will be provided unsecured. For loans of over £250,000, security will be taken in the form of a standard fixed and floating charge.

Who Can Apply

Applications are accepted from charities or social enterprises based in the UK.

To be eligible, organisations must:

  • Exist for the benefit of society/environment.
  • Be incorporated and based in the UK, and deliver the majority of their services and social impact in the UK.
  • Be one of the following legal forms:Charitable incorporated organisation registered with the Charity Commission of England and Wales, the Office of the Scottish Charity Regulator and/or the Charity Commissioner for Northern Ireland.
  • Company limited by guarantee registered with the Charity Commission of England and Wales, the Office of the Scottish Regulator and/or Charity Commissioner for Northern Ireland.
  • Community interest company limited by guarantee.
  • Community interest company limited by shares.
  • A registered society (for community benefit) under the Co-operative and Community Benefit Societies Act 2014.
  • Community benefit society under the Co-operative and Community Benefit Societies Act 2014.
  • Organisations that are not one of the above legal forms must have a social object, asset lock and restriction on the distribution of profits written into their governing documents at the point of application.

Organisations must also meet the following criteria:

  • Have been actively operating for at least two years.
  • Have a turnover minimum turnover of £400,000 in their last financial year (or £200,000 if the organisation is based in Scotland or Wales, or is BAME-led, ie 51% or above of its board and SMT are from BAME backgrounds).
  • Have more than 50% of income from trading activity. (NB This eligibility criteria does not apply to registered charities and further education colleges.)
  • Be able to demonstrate they will be improving people’s lives or the environment they live in.
  • Be able to confirm that the they have been impacted by coronavirus/COVID-19.
  • Demonstrate they have a viable business if it were not for the pandemic.
  • Be able to confirm that the organisation is not subject to any insolvency proceedings, eg winding-up, administration, insolvency, bankruptcy.
  • Be able to confirm that the loan will not be used in an excluded sector.
  • Businesses who have taken out a Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) or Bounce Back Loan Scheme (BBLS) are able to access the new scheme.

Funding is not available for:

  • Banks, building societies, insurers and reinsurers (excluding insurance brokers).
  • Public sector bodies.
  • State-funded primary and secondary schools.

Eligible Expenditure
The scheme supports access to finance for charities and social enterprises working to improve lives or the environment in the UK as they recover and grow following the COVID-19 pandemic.

Loans can be used for business purposes, including, managing cashflow, investment and growth. The scheme is designed to support businesses that can afford to take out additional finance for these purposes.

A key aim of the government’s Recovery Loan Scheme is to improve the terms on offer to businesses, but if SIB can offer a business the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, it will do so.


How To Apply
The deadline for applications is 21 November 2021 (midnight). Applications will be reviewed on a first-come, first-served basis.

An online application form and guidance documents are available on the SIB website.

The scheme will run until 31 December 2021, subject to review.

Useful Links
Recovery Loan Fund

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