A blended finance programme to provide patient and flexible social investment for organisations post-Covid.

In May 2020 Access received £30m of grant funding from dormant accounts to create new blended finance programmes in the social investment market.

The Flexible Finance programme will commit at least £22m of that amount and is seeking to address gaps in the supply of more patient and flexible social investment products for charities and social enterprises which are not widely available in the current market place. This is partly caused by the low or uncertain expected financial returns of these investments at the current time (for the borrower, social investor and capital providers). It aims to address a different, longer term, and potentially riskier financing need than is met by (for example) the Growth Fund or other Access programmes, whilst also trying to attract capital providers with differing risk appetites to blend with our grant.

As set out in the Investment Policy, there are three primary objectives for the programme:

• Delivering sources of finance to the market which are patient and/or flexible, and different to what is currently available
• Effectively facilitating the flow of capital, demonstrating efficient use of subsidy to ensure capital can flow from different sources or in a different way
• Reaching parts of the market still underserved, usually including diverse-led organisations, and committing to strong equalities practices within both the blended fund and the investor/partnership as a whole

We are working with a number of social investors to progress use of Flexible Finance grant into funds that meet these criteria, following an application process that opened in 2020.  We are no longer accepting further expressions of interest.

Access is a wholesaler of grant subsidy into social investment funds and other initiatives. Therefore we do not make funding available to charities and social enterprises directly. If you are a charity or social enterprise looking for support or to find out more about social investment please visit Good Finance.

Funds approved so far

Seven proposals have now been approved and have launched.  The details of these seven funds are below and are correct as of May 2023. 

Resonance Community Developers (at least £2.06m from Flexible Finance) is a fund designed to help communities create and own income-generating assets such as affordable homes, sports facilities or renewable energy and will initially invest in community projects across three initial areas: Devon/Cornwall, Gloucestershire and the North West. The plan is to grow to operate nationally. Investments will be in the form of equity or sub-ordinated debt, typically in the range £500k-£2m (average £1m), with an aim for projects to refinance once established (typically after three years).

Sumerian Foundation (£700k from Flexible Finance) will offer diverse forms of patient and flexible capital (including, but not restricted to, quasi-equity or equity, revenue share agreements, profit share agreements and preference shares). The typical investments range from £70k-£200K (averaging £120k) and with repayment terms of 10+ years. Sumerian Foundation provide in-house pre-investment support and post investment mentorship to all investees.

Social Investment Business (£2.5m from Flexible Finance). This fund will offer grant and support funding to be used alongside the Recovery Loan Fund to support Black and minoritised ethnicity-led charities and social enterprises based in and delivering impact in England. This tailored funding and business support will be delivered by Social Investment Business in partnership with The Ubele Initiative and Create Equity.

Key Fund (£1.8m from Flexible Finance) offers revolving facilities of up to £150,000, which can be drawn and repaid flexibly as needed. Facilities are offered for an initial period of up to five years, after which any balance can be converted into a standard three-year term loan. The Flexible Finance Fund is open to organisations in the North and the Midlands to provide support with rising costs and inflationary pressures. The fund’s co-investors are Ceniarth and Big Society Capital.  

Charity Bank’s LEAP programme (£2.775m from Flexible Finance) offers flexible loans of between £25k and £325k with terms ranging from two months to ten years. The fund will seek to invest in high impact organisations offering flexible repayment terms, with a focus on supporting excluded social entrepreneurs and organisations with diverse leadership.

Growth Impact Fund (£2m from Flexible Finance, plus at least a further £500k into its Technical Assistance facility) is a collaboration between Big Issue Invest, UnLtd and Shift Design.  It targets organisations that are improving their team’s diversity and are tackling inequity, and offers between £50,000 and £1.5m across three different investment types – equity, revenue share and patient debt.  A key feature of the fund is the support that can be provided both before and then alongside investment.

Cooperative and Community Finance & Cooperatives UK (£2.263m from Flexible Finance) have together launched a fund to support Community Share projects in underserved areas with matching equity in the form of community share purchases, with additional debt finance alongside where needed.  The fund is also trialling a new product, providing up-front finance coverage for “subscription shares”, where individuals who can’t afford a lump sum can purchase their share in instalments over the course of a year.

Expressing interest in the programme

As of 1 October 2021 we are no longer accepting any new expressions of interest in accessing finance through the programme.  This may change in the future, and if we open up a further window the details of that will be provided here.

Members of the Blended Finance Investment Committee

Franz Ranero- Chair

Heather Hilburn

Martin Rich

Emilie Goodall

Seb Elsworth

Anna Shiel– Head of Origination at Big Society Capital

Bayo Adelaja– Founder and CEO of Do it Now Now. Bayo has some significant trustee roles in high profile organisations as well as experience in working with foundations to advise on EDI policies and creating new funding programmes to specifically support the BAME sector with COVID response.

Bonnie Chiu– CEO of The Social Investment Consultancy and a founder of the Diversity Forum for Social Investment. Bonnie has been involved in a number of other specific projects within the social investment space including supporting BSC on the Women in Safe Homes fund.

Alastair Davis -CEO of Social Investment Scotland (SIS) and has been at SIS since 2009. He has been involved in the design and development of a number of social investment programmes in Scotland and beyond. Alastair is also a founding director of SIS’s subsidiary SIS Ventures, making equity investments in impact led enterprises in Scotland. Alastair is also on the advisory board of Scottish EDGE who make grant/loan blend investments in early-stage companies.