How the Growth Fund works

By blending loans with grants to bridge the finance gap.

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By blending loans with grants to bridge the finance gap between what social investors can offer and what charities and social enterprises need

The Growth Fund provides funding on a wholesale basis, through social investors. Charities and social enterprises must apply to social investors for Growth Fund finance, not directly to Access.

GF flow chart 2

Social investors apply to Access for a blended financial package, comprising a grant from the Big Lottery Fund alongside a loan from Big Society Capital. The social investor is permitted to substitute, match or add to Big Society Capital loan funding with third party finance or its own funds (provided that no private benefit accrues), although that is not generally expected or required. 

Financed in this way, social investors are able to offer a wider range of funding products to a wider group of charities and social enterprises than if solely accessing loan finance themselves. 

The Big Lottery Fund grant can be used by social investors for the following:

Grant A.  to support the higher transaction costs associated with managing smaller amounts of finance to these organisations. 

Grant B.  to combine with loan finance and to lend on to charities and social enterprises, allowing the social investor to take greater risk in their lending. 

Grant C.  to be provided as a grant to the charity or social enterprise alongside the loan (as long as at least 50% of the total funding is loan), or can be used with a certain degree of flexibility to support the development of risk finance products within the parameters of the Growth Fund. This tranche is optional.

Timescales

The Growth Fund is currently open for applications from social investors until the funds are dispersed. This is anticipated to occur in early 2018.

Having received the funds, social investors are able to make loans over a period of 3-5 years, with repayment periods of a further 3-5 years.

Who can apply to the Growth Fund? 

As the Growth Fund is provided on a wholesale basis, through social investors, charities and social enterprises will not be able to apply for Growth Fund finance directly to Access but rather via a social investor.

Social investors or aspiring social investors can apply to Access for funding – namely a grant from Big Lottery Fund alongside a loan from BSC. In this way, social investors will be able to offer a wider range of products to a wider group of charities and social enterprises than if solely accessing loan finance themselves.

Further information

You can access an overview of the Growth Fund here. 

The Growth Fund is open to expressions of interest from potential social investors – please read our accessing the Growth Fund for social investors page and then complete the Expression of Interest (EOI) form if interested. 

If you are a charity or social enterprise interested in the Growth Fund you can find out more on our accessing the Growth Fund for charities and social enterprises page. 

To view the latest data, evaluation and insights from the Growth Fund you can visit our Learning and Research page, our blog and our Quarterly Dashboards

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