Funding for social enterprises
In recent years, social enterprises have become more prevalent throughout the UK – in fact, there are currently over 100,000 social enterprises that contribute £60 billion to the economy and employ approximately two million people. So, what exactly defines this type of business? To put it simply, social enterprises are businesses that trade for a social or environmental purpose.
From tackling homelessness and promoting sustainable agriculture to helping marginalised communities; their endeavours are as diverse as they are impactful. However, just like any type of business, achieving these ambitious goals requires financial support that can prove challenging.
Options available
While it cannot be argued that finding the capital to get such a venture off the ground is sometimes difficult, there are at least quite a few different options available; such as grants, loans and various types of investment. The following list highlights some of the organisations that are worth your time and consideration.
• Startup loan from the British Business Bank: From multiple high street banks to online lenders, there’s certainly no shortage of loan providers out there, the only problem is knowing which ones are right for you – so, a good place to start is the British Business Bank. Their Start-up loan can offer up to £25,000 for new businesses, but not only that, they also offer free support and guidance to help you write your business plan, plus, up to 12 months of free mentoring if your application goes through. See their website for more details – (https://www.british-business-bank.co.uk/start-up/).
• Loan from the Charity Bank: The Charity Bank was set up to provide loans to charities and social enterprises that struggle to find funding. What sets them apart from the usual banks is that all their shareholders are either a charitable trust, foundation or social purpose organisation. Find out more here https://www.charitybank.org/charity-loans.
• Smaller loans from SWIF: Thanks to the recently introduced South West Investment Fund (SWIF) via the British Business Bank, there’s now another new source of debt finance available – for amounts of £25,000-£100,000 – and is aimed at startups, early stage, or small businesses that are looking to grow. Check out our article here for more details on the SWIF https://www.accesstofinancesw.co.uk/news/1647570.
• Loans from SWIG Finance: SWIG Finance can offer startup loans and various types of business loans, as well as also being another option for obtaining a loan via the British Business Bank’s South West Investment Fund. Their loans range from £500-£250,000 – to find out more you can check out their website https://www.swigfinance.co.uk/.
• Grants from South West Enterprise Fund: Another organisation worth investigating is the South West Enterprise Fund (SWEF). They offer grants of up to £2,000 for people aged 18-30, and what’s particularly good to know is that they especially back individuals who’ve struggled to find capital elsewhere. See their website for details https://www.swef.uk/.
• Investment opportunities via Big Society Capital: Aside from loans and grants, there is also investment-based funding available – and so the ideal organisation to look to for funding a social enterprise is Big Society Capital. They were purely set up to help find financial investment for organisations that are tackling social issues and inequalities in the UK. If you’re interested then head over to their website https://bigsocietycapital.com/.
• Angel investors: At the end of the day, social enterprises are profit-making businesses so business angels are definitely worth considering. One such Angel network that you may want to check out – Mainstream – is based in Exeter. Established by Michelmores law firm back in 2019, they are registered with the UK Business Angels Association (UKBAA), and have a 60-strong team of investors/entrepreneurs who can invest and offer support to early-stage companies.
A few other sources of Angel investors are Dorset Angels and Bristol Private Equity Club. They both potentially offer capital investment to SMEs and startups, and are certainly worth looking at. For more details go to: https://www.michelmores.com/mainstream/, https://www.bristolprivateequityclub.com/, and https://dorsetbusinessangels.co.uk/.
Finally, another great organisation that’s worth your time is https://www.heartofswgrowthhub.co.uk/ – they offer free business advice and support services for startups and established businesses – covering Devon and Somerset.
Are you looking to set up a social enterprise in the SW? If you are then let us know what you’re up to via the comments!