One of the biggest changes in the social enterprise sector in recent years has been the almost complete switch from grant-funding as a means of financing social enterprise start-ups to loan finance and other kinds of ‘social investment’ models.
Now and for the foreseeable future, social enterprises that are serious about growing and scaling-up over the longer-term will need to consider whether they can service debt finance from specialist lenders (often called community finance institutions).
Who provides specialist loan finance for social enterprise?
Increasingly, some banks also offer time-limited competitions and awards to help entrepreneurs start new social ventures. When we hear of a new award scheme we generally try to promote it to our readers, so sign up to receive our updates and news.
Unfortunately, many people still assume that as long as they have a good social enterprise idea someone will give them a grant to start up the business. This simply isn’t the case.
There are currently no grant-making funds dedicated to funding new-start social enterprises simply because they are social enterprises.
That said, there are some charitable funders that may have an interest in your new social enterprise but even here they will need to see a business plan, and they will want to be confident that your social enterprise can eventually be self-sustaining from earned income. You will need to identify charitable trusts and bodies that have an interest in your services, your social mission, or the community benefit you deliver. There are several ways you can do this:
BVSC may be able to help you by running a FunderFinder search. Contact the BVSC Helpdesk.
Alternatively, the Directory of Social Change publishes guides to grant-making trusts that are industry-standards.
Programmes operated by the Big Lottery may also offer a source of funding for some social enterprises and community ventures. You can use Big’s Funding Finder to check the criteria of its active programmes.
The Big Lottery Awards for All England programme is currently the lottery’s easiest-to-access programme, offering grants of between £300-£10,000 for initiatives that offer clear community benefit.
And don’t forget UnLtd, the UK’s largest network of social entrepreneurs and the biggest small-grants maker and provider of support, advice and resources to social entrepreneurs.