Emergency Lending – funding short-term survival and long-term growth

This blog draws on the evaluation of our Emergency Lending programme that launched in the early stages of the pandemic and looks at the insight and learning that may apply to other emergencies or crises.

February 6th, 2023 by Ana Van Bilsen Irias

In May 2020, Access was tasked with rapidly designing and launching an Emergency Lending programme as an immediate response to the problems being faced by charities and social enterprises in the early stages of the pandemic.

The aim was to support immediate short-term emergency borrowing needs and ensure that more of those that needed repayable finance to survive could access it, even if their future income streams were damaged or uncertain. 

At a glance – the Emergency Lending programme in numbers

In total, five social investors distributed over £5.5 million in grant to 70 organisations enabling them to take on loans during COVID 19 pandemic that wouldn’t have otherwise been viable, unlocking £21 million of investment.

As its name suggests, the programme was designed to get money flowing very rapidly at a time of great crisis and uncertainty.  There were only five weeks between the announcement of the programme at the end of May and the first fund being approved in early July and funds began to flow to frontline organisations in September.

The evaluation shows that the programme was able to support organisations through the crisis and out the other side. Most organisations saw an improvement in their actual and perceived resilience between the point of investment and one year on and many attribute this to the investment received. After that year almost as many organisations described stories of growth in services and impact as described stories of stabilisation and survival.

Over 35% of grant and over 40% of loans were disbursed to the 20% most deprived areas in the country. Although this distribution of Emergency Lending is not quite so strongly correlated with deprivation as some of our other programmes, notably the Growth Fund, this is still a more significant correlation with deprivation than the wider social investment market.

The programme supported larger organisations than Access programmes typically support, and disproportionately benefited organisations based in London and the South-East. This was not necessarily the profile we might have imagined at the outset. However, it clearly did meet emergency related need. Many of these organisations were needing to continue to trade and possibly even expand to meet further demand. For these organisations available grant and support schemes were not going to be sufficient to meet their needs.

The programme reached reasonable proportions of organisations led by women (48%) and people with disabilities (11%) but performed less strongly in terms of serving black and minoritised-led organisations, and those led by people identifying as LGBTQ+ (both 3%). Access has reflected with partners on this. Subsequent programmes have a clearer and more intentional equity, diversity and inclusion focus to ensure that more underserved groups can access blended finance in the future.

At a glance – the stories behind the Emergency Lending programme

As you might expect for this type of programme, the organisations supported operate across a wide range of sectors, with the most common beneficiary groups being young people and people living in poverty.

Note: The source of the “market” data is Big Society Capital’s Deal Level Data from 2020.

Those supporting people into employment, education or training received the most support, followed by those working in arts, heritage, sports and faith and mental health and well-being.

This included:

  • Enabling Autism Plus, one of the largest charitable independent providers of disability care in the North of England, to put in place new digital systems that would increase capacity, support growth and cut costs.
  • Support for Gingerbread, who provide advice and support to single parents, to expand their advice services and upgrade their digital tools to reach more people and cope with increasing demand.
  • Providing working capital to Chanctonbury Leisure Centre, based in Storrington, to support the relaunch of their services post-pandemic and facilitating the upgrade of their outdoor sports pitch to attract more trading income.

Insights and learning

The key lesson from the programme was how organisations used the support from social investors.

Funding short-term survival and long-term growth – Originally it had been imagined that the Emergency Lending programme might be used more for working capital to bridge lost income streams, or support cost-cutting and consolidation, but many investments were to enable services to be redesigned or even expanded.

Rather than just managing downsizing or meeting immediate needs, in many cases, social investment supported the long-term growth of organisations, and the programme was able to play a role in supporting organisations through the crisis and out the other side, not just a short-term sticking plaster.

A crisis response must be flexible and adaptable – By their nature, crises are fast-moving and any response will launch alongside and prior to other responses. With multiple sources of support becoming available, both from the public sector and third sector, the Emergency Lending programme found its niche and delivered its value in areas that we might not have predicted at outset.

Blended grant can still be deployed effectively and efficiently in a crisis, even at pace – the grant deployed, the investment it unlocked and the speed at which it was distributed supported investments that would not have otherwise been viable at a time of great need, reducing pressure on the system and unlocking other vital funds.

The full evaluation of the Emergency Lending programme is available here alongside a summary of the key findings.