In May 2020 Access received £30m of grant funding from dormant accounts to create new blended finance programmes in the social investment market.
That funding has been earmarked for two main purposes:
- Grant to provide blend to support emergency lending to charities and social enterprises, facing financial challenges due to the impacts of Covid-19 (“Emergency Lending”)
- Future blended finance initiatives, which create more sources of more patient and flexible repayable finance, to serve the capital needs of charities & social enterprises (“Flexible Finance for the Recovery”)
This application process relates to the second of these initiatives, to which Access will commit at least £21m.
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.
Consultation to Date
The Flexible Finance for the Recovery programme represents a unique opportunity to create new, more patient and flexible forms of finance, and to widen the reach of social investment into underserved parts of the charity and social enterprise sector. We launched our “Call for Ideas” with the Connect Fund in early July in order to consult the market on the best way to design this fund so that we ensure we maximise the opportunity that it represents, enable the right interventions to be created, and provide the flexibilities that social investors will need.
We have been encouraged by the responses to the Call for Ideas, and the subsequent discussions and roundtables. Highlights include:
- The need to embed diversity and inclusion across the programme and reach charities and social enterprises led by BAME individuals and other groups who have typically had less access to social investment
- Importance of new methods and partnerships if we want to achieve different outcomes
- Importance of closer relationships with investees as part of patient/flexible schemes, and a desire to build in post-investment support
- Need to address complexity and gaps, yet create simple to understand products and pathways
Through this process we have ascertained that only a minority of potential partners in this programme are close to having a viable and ready proposition to consider for investment, and in most cases a period of further discussion and co-design is likely to be needed. Therefore, rather than open for direct investment applications as originally intended, we now feel that the market will be better served if we adopt a slightly different approach, recruiting to a first development cohort.
The programme 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 (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.
We are making grant available as blend in order to allow other sources of capital to be more flexible and patient, and to enable those products to reach to the organisations which need them. Therefore social investors should not solve for how the Access grant delivers the above products, but rather how our grant enables other capital to provide these products via a blend. Leverage of other capital is therefore critical.
First Development Cohort participants will be selected by an investment committee with assessment scoring based on responses given to questions set out in section 10 of the application form. Consideration will also be given to creating a balanced and diverse portfolio that addresses an array of different borrower needs, to maximise learning across the programme as a whole.
How to apply
Please read the full application documentation before applying.
We will aim to close the application window by Friday 30 October 2020 at 12pm. Keep an eye on our website and twitter feed for the latest information. Please send your submission by the deadline to firstname.lastname@example.org.