The Social Investment Business (SIB), Access – The Foundation for Social investment, The Ubele Initiative and Create Equity have today announced £2m worth of grant and support funding to be made available to be used alongside the Recovery Loan Fund to support Black and minoritised ethnicity-led charities and social enterprises based in and delivering impact in England.
The recent report from the Adebowale Commission highlighted the structural barriers that Black-led social enterprises face in accessing finance. SIB’s analysis of data on over 4,000 organisations in its diversity dashboard found that and Black and minoritised ethnicity-led organisations tend to be smaller in size and have experienced systemic and historic underinvestment.
This new grant funding from Access’ Flexible Finance programme will be deployed to address these historical imbalances, offering the following:
· Unrestricted grants alongside loans with up to 100% of the loan value if needed
· Bespoke business support
· Eligibility for RLF reduced from £400k turnover to £200k turnover
· Minimum loan size reduced to £50k from £100k
This tailored funding and support for will be delivered by Social Investment Business in partnership with The Ubele Initiative and Create Equity. They will bring their networks, expertise and understanding to the project, and provide support to organisations throughout the funding application and assessment process.
The Recovery Loan Fund continues to be primarily a loan fund and applicants must apply for a loan in order to be awarded a blended grant. Grants will only be awarded to organisations that are Black and minoritised ethnicity-led: this means 51% or above of the board and senior management team are from Black or minoritised ethnic communities. The grants and support will be used to widen accessibility of the fund to groups that have traditionally found it more difficult to secure investment.
The £2m of grants and support will be matched with £2m of loan money from the Recovery Loan Fund with that money coming from the following investors who are supporting this initiative: founding investor the Fusion21 Foundation, Church of England’s social investment programme, Big Society Capital, MFS Investment Management and Treebeard Trust.
Nick Temple, Chief Executive of Social Investment Business, said: "We are pleased to announce this Flexible Finance project, supported by Access and delivered with our partners Create Equity and the Ubele Initiative. It aims to begin to rectify historic underinvestment in Black and minoritised ethnicity-led organisations, and to respond to the disproportionate impact of Covid on those communities. This underinvestment and impact has been clear from our own data, and supported by the findings of the recent Adebowale Commission. We believe that working in genuine partnership, making substantial grants alongside loans, and providing tailored support will begin to widen access and make finance more suitable to those who have been systemically excluded in the past. In doing so, it will help our goal of providing finance and support for a more equal society"
Seb Elsworth, Chief Executive of Access – the Foundation for Social Investment said: “We know that many charities and social enterprises will need patient and flexible forms of investment to facilitate their recovery from the pandemic. However, we also know that unless we do things differently, groups and communities which have traditionally been underserved by social investment programmes are likely to miss out again. Access launched the Flexible Finance for the Recovery programme in part to address this challenge, and we are delighted that the funding we are providing to the Recovery Loan Fund will be used to tackle it so directly, ensuring that many more black and minoritized ethnicity-led organisations can benefit from the finance on offer.”
Yvonne Field, Founder and CEO of The Ubele Initiative, said: “The COVID-19 pandemic has raised new challenges for social businesses run by Black and racially minoritised founders. These enterprises have been historically under-invested in and therefore less able to deal with external shocks. This is why, The Ubele Initiative is excited to be part of delivering the Flexible Finance programme with SIB and Create Equity. The programme will open up crucial Social Investment as both grants and loans to social businesses who hadn’t considered it before. We feel this investment and the package of support available will be truly transformative, taking some amazing social businesses to the next level.”
Kevin Osborne, Founder and Chief Executive of Create Equity, said: “SIB has correctly identified the problem of racially inequitable funding in previous rounds of the Recovery Loan Fund and has come up with a solution that has every chance of driving more, and much needed, finance to Black and Brown-led organisations. This is Create Equity’s mission, and we are excited to help drive the success of this initiative.”
How to apply
The Recovery Loan Fund is open for applications until 11.59pm on Friday 20th May 2022.
For more information, including full eligibility criteria, product details and FAQs, visit: https://www.sibgroup.org.uk/recovery-loan-fund