INTERESTED IN SOCIAL INVESTMENT?

FIVE WAYS TO HELP YOU GET PAST THE FIRST HURDLE

CAF Venturesome, our pioneering social investment arm with over ten years' experience in providing finance to charities, social enterprises and community groups, receives hundreds of enquiries every year.

If you're a charity thinking about social investment as a potential funding option, how do you increase your chances of getting past the first hurdle in the application process?

Read our five top tips below:

1. MAKE SURE IT'S A LOAN YOU NEED, AND NOT A GRANT

Social investment should be seen as just one option in a range of income sources, rather than as a replacement for grant funding or an alternative to trading income. Whatever investment is offered, it will need to be repaid.

We provide social investment in the form of underwriting, loans, quasi-equity and equity. So if you’re considering social investment, a crucial question to ask is “How would my organisation repay it?”

2. APPROACH YOUR OWN BANK FIRST

CAF Venturesome provides unsecured loans, so if you own a fixed asset that can be used to secure finance - such as a property - we would advise you to approach your bank first. There are also specialist third sector banks such as CAF Bank or Charity Bank who specialise in secured lending to charities.

These organisations may be able to provide cheaper capital that is repayable over a longer term. In fact, even if you require an unsecured loan, it’s best to try your bank first as this will help you to develop a better relationship with them.

3. DEMONSTRATE THE SOCIAL IMPACT OF YOUR ORGANISATION

The philanthropic nature of our funds means we can only take a high financial risk on organisations that are able to demonstrate a high social impact. Although it can be difficult for a charity to make this judgement about themselves, we recommend you try to bear this in mind.

4.  DEMONSTRATE AT LEAST ONE YEAR'S INCOME

To be eligible for investment, organisations need to demonstrate at least one year’s income – either through trading or donations. In addition, organisations should be able to demonstrate their social impact, or at least that key personnel have a proven track record in delivering its social objectives.

As a result we're unlikely to be able to invest in start-ups or brand new ventures.

5. GIVE YOURSELF ENOUGH TIME

Although there’s no fixed time scale in which we conduct our due diligence, the process takes a few weeks at the very least. Our investment committee gets together on a monthly basis, and we can only give you a decision after this meeting has taken place. Of course we'll be as transparent with you as we can about timings, but it’s best to give yourself plenty of time.

CAF Venturesome can help you grow, get through the difficult times and plan for the future. 

If your organisation has been operating for more than a year and is looking for financial support of between £25,000 and £250,000 - or up to £350,000 in certain circumstances - call us today on 03000 123 300 or email venturesome@cafonline.org.

 

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