Jo Wedderspoon_2

Joanne Wedderspoon

Development Manager

Charities Aid Foundation


How working with this impactful charity allowed us to develop a new 10-year loan product.

12 August 2020

Regional area:            North West
Sector:                         Children & Young People
Social investment:     £300,000 standby facility; 10-year secured loan when drawn down
Purpose:                      To finance fit-out and upfront costs of new charitable nursery 
SDG:                             We believe the organisation contributes to the
                                      UN’s Sustainable Development Goals (SDGs) to reduce inequality.



patient capital to support growth projects

It’s been quite a journey

It’s been over one and half years since Bright Futures had the ambition to open up a second nursery, for an additional 90 children, serving a local community in a deprived area of Lancashire. The charity is working in partnership with Rossendale Borough Council to commission a new 6,700 sq. ft. facility, with the expectation to open in Autumn 2021.

Bright Futures is a charitable early years education provider established in 2012 in Rossendale, Lancashire, which currently caters for about 60 children in the local area and holds an “Outstanding” rating from Ofsted.   The charity generates income from parent fees and ‘free hours’ public sector payments.  This is a sustainable business model that has generated a surplus each year since opening.  This surplus funds its charitable activities offering a valuable range of affordable services for local families, including free nursery sessions, access to childcare out of term time and free meals. It also runs family support services such as weaning and behaviour management programmes.

Nursery school equipment

Social investment can be more flexible than traditional lending

Bright Futures decided to explore taking out a loan to fund their growth plans as they believe that growing through commercial borrowing puts them on a level playing field with ‘for profit’ competitors.  However, when they looked at traditional borrowing sources they found that lenders insisted on personal guarantees/security from trustees/directors.  So they then started to explore what would be possible with social investment and found that it could be more flexible.  CAF Venturesome is able to offer this 10-year facility as a secured loan, when drawn down, with limited liability.

Working in partnership

CAF Venturesome first met Bright Futures back in March 2019, during the inception stage of the project, and has played an active role in supporting the charity to achieve its ambition.  Both organisations have a clear shared vision of investing in sustainable social enterprise growth and this has led to a sustained partnership over the last 16 months, from the first enquiry to approval by the Venturesome Investment Committee, all whilst navigating repeated local council delays.

We took the time, in the early days of the partnership, to understand the financing need for a small charity with ambitious growth plans. It became obvious to us that Bright Futures would need a longer term repayment period so that they can generate higher surpluses earlier in the project that will fund more charitable activities. 

However, the COVID-19 crisis happened just before the final decision to approve the facility.  We had to look at this social investment again to ensure that we understood the impact the pandemic would have on the charity.  Whilst the Lockdown did indeed impact the business we felt that it was manageable because of the ‘free hours’ payments and furlough support.  There has been very little real impact on the new project and it is planned to open in Autumn 2021.

Growing social impact

The supported new site will not only more than double the number of children Bright Futures can look after with its Outstanding service provision, it will also increase the number of charitable places it can offer and fund its other charitable activities. The centre will not just provide day care or education. The places will offer the best of both in a wrap-around early learning experience to give children the best possible start in their first few years.

“The CAF Venturesome team were exceptionally thorough but all conversations were conducted in the spirit of partnership for common goals.  The rigorous financial modelling will be very valuable now and it the future.

CAF Venturesome will be our first port of call for all our future financing requirements.”

Martin Kirk, Chairman – Bright Futures

Understanding the needs of the charity allowed us to develop a new product

Our standard social investment terms have a duration of up to six years, carrying 6.5% interest on an unsecured basis. The investable size currently ranges from £25k to £400k.

For a while we have been hearing from social organisations that they need more patient, risk bearing capital (in line with the recent research by SHIFT) and we have been exploring what we can offer to support this.   There is a need for capital to fund social investment to finance longer-term capital projects.  However since the Covid-19 crisis badly affected social organisations, financially and operationally, many would welcome the opportunity to repay their loans over 10 years instead of our current six.  

Working with Bright Futures and understanding why they needed a longer term repayment term has allowed us to expand our social investment products to include loans up to £400,000, repayable up to 10 years. We are delighted we were able to make our first 10-year loan facility to back this socially impactful project. The facility also allows for a lower than usual interest rate for the first three years to minimise financing costs as the charity grows. This is a product we are hoping to use frequently going forward to achieve impactful growth projects.

We are able to extend the term of our loans because our philanthropic supporters have been willing to extend the terms of their social investment loans to us.  We are very grateful to them for supporting social enterprises and charities to recover from the current pandemic, allowing them to stabilise, grow and build back better. 

This longer-term social investment is not suitable for everyone, and may require a form of security, but our team will be happy to help you explore the possibility of a 10-year social investment loan to help your organisation recover and grow back stronger.

Please also get in touch with the team if you’d like to learn more about multiplying the social impact of your philanthropic capital by funding social investment with a loan to CAF Venturesome for up to 12 years.


CAF Venturesome is dedicated to providing social enterprises and charities with the affordable, flexible finance they need to sustain and grow their social impact and we reiterate our promise to do all that we can to support high-impact social organisations during this very uncertain time. 

Talk to our team on 03000 123 300 or email us at and we’ll be happy to help.