Could a loan help your charity to thrive?

In the right situations and if your governing documents allow it, loan finance could help you to strengthen your financial position, to plan ahead with confidence and do even more for the communities that turn to you for support.

This article outlines some of the ways in which a loan can help and highlights key points that you need to consider.

Loans can help your expansion

Loans can help you to grow your income and reduce your reliance on existing sources of funding.

For example, organisations which offer supported living facilities might want to set up in a new location – but they need to fund the upfront costs of buying and converting a property. A loan can give you the capital to do this. But you’ll need to make sure your future income will be enough to repay the loan.

We’ll help you navigate all of this as part of the loan application process. Your first step is to prepare a business plan with realistic financial projections. Don’t forget to outline best-case and worst-case scenarios to help stress-test your plan and mitigate potential risks.

Loans can speed up plans

A loan could help you get a project off the ground more quickly.

Applying for grants and fundraising for major projects takes time, which means your beneficiaries could have to wait a while to benefit from your new or improved services and facilities. Or, the idea might become unaffordable or financially unviable as time passes. A loan can help you to put the required funding in place, so that you can start a project sooner.

The time needed to process a loan application will depend on how quickly you and your solicitors can provide the information requested by the lender. Typically though, a loan can be approved within a few weeks of the initial enquiry.

Loans can help secure your own premises

A loan can allow you to purchase or build a property, instead of continuing to pay rent to a landlord.

Owning your premises can help your organisation to become more financially sustainable. It can quite literally cement your place in the community, give you freedom to make long-term plans with confidence and get greater control of your future outgoings. As well as serving as a base for staff and volunteers, you could use the asset to provide face-to-face services to clients and rent out any surplus space to partner organisations.

Loans can help you make an impact sooner

Borrowing money to invest in a facility, service or vital equipment can be a sustainable way of growing your organisation’s impact. Additional income generated from your new asset can be used to service the loan repayments.  For example, buying a piece of capital equipment rather than leasing or hiring can save you money in the long term, giving you an asset that can increase in value over time.

If you’re building or renovating, you might lessen the impact of inflationary price rises by starting sooner rather than later. You can also make sure that your beneficiaries’ needs are designed in from the outset. Loans let you plan ahead with freedom. A long-term loan can help you view your projected income and spending commitments in ways that help you achieve your purpose. You also avoid grantmakers’ restrictions which can dictate how grant money should be spent or through having to anticipate and address their future funding priorities.

Talking to lenders can inspire ideas and open doors

Lenders that specialise in supporting charities and social purpose organisations are well-networked. They can also draw upon expert insight and experience gained from helping to finance scores of similar projects. Getting in touch with a lender early in the project planning process can help you consider all the options to fund your project, such as blended finance packages.

Learn more about secured loans through CAF Bank


Secured loans up to 25 years

Achieve your charity’s goals with a loan of between £150,000 and £5m to support capital projects. For organisations established three years or more.

CAF Bank loans

Ready to start the conversation?

Our CAF Bank experts take the time to get to know you and your project. Then, if they think loan finance could be right for you, they will ask you to send some more information.

Get in touch to set-up an initial chat

CAF Bank loans are non-regulated products.

Loan applications subject to credit assessment. Security will be required.

Charity assets may be at risk if you do not keep up with the repayments for a mortgage, loan or any other debt secured on them.

If you're thinking of consolidating existing borrowing, you should be aware that you may be extending the term of the debt and increasing the total amount you pay.

CAF Bank Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register number: 204451).

CAF Bank Limited Registered office is 25 Kings Hill Avenue, Kings Hill, West Malling, Kent ME19 4JQ. Registered in England and Wales under number 1837656.

Charities Aid Foundation © | Registered Charity Number 268369
25 Kings Hill Avenue, Kings Hill, West Malling, Kent ME19 4TA
10 St. Bride Street, London EC4A 4AD
Telephone: 03000 123 000