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11 January 2022

Social Investment Business’ Recovery Loan Fund raises over £21m to support UK charities and social enterprises

Chopping Carrott

Social Investment Business (SIB), a leading social investor in the UK, has secured four new investors into the Recovery Loan Fund. The Church of England’s social investment programme, Big Society Capital, MFS Investment Management and Treebeard Trust will join founding investor the Fusion21 Foundation, taking funds raised to date to £21.5m (including follow-on commitments). Weil, Gotshal & Manges LLP acted as legal counsel on the investment round, and GLAS are acting as the facility and security agent. Linklaters LLP acted as legal counsel to lenders The Archbishops’ Council, the Fusion21 Foundation and Big Society Capital.

These investments will enable SIB to continue to make an existing Government guarantee scheme, the Recovery Loan Scheme, more easily accessible to charities and social enterprises who have been impacted by Covid 19 and need funds to help them to recover, adapt and grow – allowing them to continue to serve their communities in need. Charities and social enterprises can apply to access the funding by clicking here.

SIB will work with experienced social investor partners on the delivery of the Fund, including Big Issue Invest, Charity Bank, Key Fund, Resonance, Wales Council for Voluntary Action and Social Investment Scotland.

Many of the Fund’s delivery partners helped to deliver the previous Resilience and Recovery Loan Fund (RRLF). RRLF approved £28m in total funding to 77 charities and social enterprises across the UK, with £24m worth of loans and over £3.9m worth of grants approved – RRLF was recently awarded Social Investment Deal of the Year at the 2021 UK Social Enterprise Awards.

All funding purposes will be considered, including refinancing of existing debt onto more patient terms. For eligible charities and social enterprises, funding terms available are:

  • Loans of £100,000-£1.5m. (BAME-led organisations and those based in Wales and Scotland will be able to apply for loans upwards of £50,000)
  • A loan term of 1-6-years, with no penalty for early repayment
  • A capital repayment holiday for up to one year, with regular payments thereafter
  • A fixed interest fee of 7.9% per year, with an arrangement fee of 2.5% to 3% – depending on size of the loan

Rob Benfield, Director of Investments at Social Investment Business said:

COVID-19 has had significant impact on the business models of charities and social enterprises right across the UK. At a time of continued economic uncertainty we are looking to support organisations with the funding they need to adapt delivery models, diversify income streams; manage cash flow; or purchase new technology. I am delighted that our new investors have chosen to invest in the Recovery Loan Fund, recognising the opportunity it offers to play a role in creating fairer communities and improving people’s lives as we emerge from the pandemic.”

Vanessa Morphet, Head of Social Impact Investment at The Archbishops’ Council said:

“Throughout the pandemic charities and social enterprises have played a vital role in helping vulnerable people and communities. Access to affordable credit is important for these organisations to continue to adapt and thrive in a rapidly changing environment. We are very pleased that the Recovery Loan Fund will bring together government support and deep local lending expertise to enable our funding to provide access to affordable finance for organisations well placed to continue to serve their communities”.

Gabriel Ng, Social Impact Manager, Big Society Capital said:

“We believe Government guarantee schemes can play a critical role in enabling social enterprises and charities to thrive, so we are pleased to be supporting the Recovery Loan Fund – which will ensure they remain accessible for the sector during these extremely challenging times. We look forward to working with Social Investment Business to build on the achievements of the Resilience and Recovery Loan Fund (RRLF), which supported nearly 80 organisations in staying resilient during tough times – from enabling schoolchildren in Manchester to stay on top of their studies, to helping communities in Cardiff to get vaccinated. With 40% of its loans going to the 30% most deprived areas in the UK, we have seen how this model can play a significant role in supporting ‘left behind’ communities.”

Shishir Malhotra, Impact Investment Advisor, Treebeard Trust said:

“We are investing in the Recovery Loan Fund because we believe this fund fills a critical gap in the supply of social investment to charities and social enterprises looking to stabilise and grow following the difficulties faced in the last two years. The Social Investment Business has a clearly impact-first approach, and an excellent track record; we are excited to be partnering with them in the Recovery Loan Fund!”

Shanti Das-Wermes, Analyst and investment Officer, MFS Investment Management said:

“MFS Investment Management through its Impact Investing initiative is proud to be able to support Social Investment Business (SIB) in this latest funding round, building on the proven success of the Resiliency and Recovery Loan Fund (RRLF). Embedded in our purpose of creating value responsibly is a belief that it is critical to invest in the communities in which we live and work, particularly now considering the ongoing uncertainty and lasting impact of the covid-19 pandemic. Through this investment, we can help ensure that funding remains accessible for social enterprises and charities in pursuit of their long-term missions.”

Rob Powell, Director Pro Bono & Corporate Responsibility, Weil, Gotshal & Manges (London) LLP said:

“Following our work together on the Resilience & Recovery Loan Fund in 2020, it was an honour to continue our pro bono legal support to Social Investment Business on this latest round of funding for the Recovery Loan Fund. Impact is at the heart of our pro bono practice and working with the SIB team enables our pro bono efforts to be felt right across the country at a grass-roots level.”

Deion Fox, Head of Business Development (EMEA), GLAS said:

We are delighted to act as Facility Agent and Security Agent in this latest round of funding for the Recovery Loan Fund. We have seen the impact that Social Investment Business has had and can have on those entities and individuals that have been severely impacted by the pandemic and are grateful to be involved in such a positive scheme.”

Tom Quoroll, Partner at Linklaters said:

“We are pleased to have played a role in expanding this vital scheme which seeks to safeguard and nurture the important work that charities and social enterprises deliver across the UK. We believe that finance has the potential to improve society and are committed to supporting social finance projects, like the Recovery Loan Fund, to achieve their goals.”


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

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