Social Investment Fund
| Investment size | Up to £250,000 |
| Area |
All of Scotland
|
| Key dates | |
| Applications: | Enquire any time |
About this fund
The Social Investment fund offers blended grant and loan investment to social enterprises, community organisations and charities across Scotland. Our fund can make investments of between £10,000 and £250,000 per organisation with up to 25% of this in the form of a grant.
For example, with Social Investment support of £100,000:
This fund is designed to allow you to meet the needs of your business, achieve your vision and secure your future.
Loans are repayable, usually over a 10 year period and appropriate security may be required for the loan. We will discuss our requirements with you during the assessment process.
The investment can be used for:
- Working capital
- Acquisition of assets
- Business growth
- Capital expenditure
Purpose of this fund
Investments made by this fund must demonstrate that they meet one of these charitable objectives:
- To prevent and/or relieve poverty among those living in Scotland
- To advance community development and urban/rural regeneration in Scotland
- To advance education in Scotland
Who can apply?
Please visit our Social Investment Fund eligibility criteria page or get in touch with us at askchris@foundationscotland.org.uk
What can’t be funded?
This fund cannot support:
- Businesses that are insolvent or at the immediate risk of insolvency
- Proposals that are consolidation of existing debt finance
- Subsidiaries of public bodies
- Proposals capable of being fully funded on a commercial basis
- Proposals that promote religious practices or beliefs
- Schedule 3 Community Interest Companies
How are decisions made?
Decisions on applications will be made by our Social Investment Committee. The whole process can take an average of 12 weeks but is dependent upon the information that we require to complete a full and fair assessment being available.
Contact information
Central Systems Support
Chris Holloway
How to apply
If you can answer yes to all our eligibility criteria questions then please complete an enquiry form.
If you have already started an enquiry and not completed it, please login here to resume.
Frequently asked questions
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What will the interest on my loan be?
The interest rate is 6%. This is fixed for the term of the loan.
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Do I have to take a loan?
Yes, all Social Investment Fund investments are at least 75% loan.
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Why do we have to provide proof that we have not been able to secure lending from a bank or other commercial lender?
Our Social Investment Fund aims to fill the gap that exists in funding for organisations seeking to move into debt finance but unable to secure lending from a bank. If you have questions about what this means, or what constitutes a refusal, please contact us to discuss. We may waive this requirement for smaller investments.
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What about UK Subsidy Control? (previously EU State Aid)
All potential investments will be reviewed to ensure compliance with UK Subsidy Control regulations. Further guidance will be provided to organisations whose proposals progress to the next stage, but we recommend that applicants seek independent advice. Applicants are required to inform us if they have already received funding that is considered to be UK subsidy control (this could be in the form of grants or subsidised loans).
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Why are CIC Schedule 3 Companies not eligible for investment?
We are not currently accepting applications from CIC Schedule 3 companies because of the possibility that they may generate financial benefit for individuals, such as shareholders and investors. This is not compatible with the charitable aims of the fund. We are constantly reviewing our eligibility criteria and will update the website and FAQ’s should this situation change.
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Are there any associated fees, e.g. legal fees?
There are no arrangement fees or legal fees in the normal course of making the loan and grant. There is a cost to drawing up and registering the security for the loan and any ranking agreements that may be required; this cost will be deducted from the grant. You may wish to take your own legal advice before signing the loan and security documents, and this may incur a charge. In some cases, where particular conditions are imposed, the applicant may have to seek independent legal or other advice and this may incur a cost.
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Can we have other lenders?
Yes, but we will ask to see the Terms & Conditions that apply to other loans, so we're aware of any restrictions or conditions that other existing lenders may have imposed in case they affect the terms of our investment. We also ask that you inform us if you intend to take on any new debt funding during the Social Investment Fund loan term.
If there are unsecured loans in the company from Directors or other individuals, we may ask for a Letter of Postponement to give us comfort that the repayment of the Investing in Enterprise loan will be given priority. This prevents organisations from using the Social Investment Fund investment to repay other existing debts.