Not all lenders are equal - make sure that you get the right one

CERT work with loads of organisations seeking social investment - we help with business and financial planning, social return on investment and much more - and experience has shown us that it is essential that social enterprises don't just take the first loan offer that comes along. In fact doing that is a sure fire way to run into problems further down the line.

At a time when the sector seems to be facing such financial uncertainty, many organisations are challenging the wisdom of taking on loans at all . Of course, loans are not always right for every situation and careful consideration of the financial commitment involved should be taken.

In the right circumstances and from the right lender, however, loans can be a valuable tool for a charity or social enterprise to further its mission and have greater control over its future.

Why take on a loan?

A loan can empower organisations to seize opportunities, extend their reach, unlock other loans or grants, smooth cashflow and improve sustainability.

Typically social enterprises borrow money to buy assets such as buildings, to provide working capital to start new projects or open up new area of work or to invest in cost saving technology such as green energy systems etc.

For example CERT took on social investment from KeyFund when we were offered an opportunity to move into a new area of work. We knew that the work would generate income for us however it would take 3 months to set up before the work actually started and another 6 months for the first payments to start coming in. In the meantime we would need to employ staff and pay wages.

KeyFund understood the situation that we found ourselves in and were able to offer working capital in the form of a loan that helped us to bridge the payment gap and open up a whole new work-stream for our organisation.

How do you find the right lender?

The first rule is take your time!

Taking the time to choose a lender that can offer the conditions, support and understanding your organisation needs is really important. Ask questions and make sure you’re clear on what is being offered and what will be expected of you:

  • Does the lender understand your loan requirements and what it is you’re trying to achieve?

  • Will you receive a dedicated manager or be working with different people for different stages?

  • What will the lender expect you to provide before approving a loan?

  • What are the conditions precedent for drawing down the loan and are these realistic for your organisation?

  • What will happen should you encounter difficulties? How would the lender manage your account?

  • What are the interest rates - are these annual or over the term of the loan? Are they fixed or variable?

  • Does the lender offer a blended loan/grant

Singing from the same hymn sheet

Your social impact should be one of your main strengths when applying for a loan. If you can illustrate and provide tangible examples that your organisation is delivering social good, there are certain lenders that will be much more willing to provide you with a loan. These include KeyFund, Charity Bank, Unity Trust, Triodos, Resonance, Social Investment Business and many, many others.

If you want any easy way to find investors that meet your specific needs there is a really good search engine on the Good Finance website -

If you are considering applying for social investment and need some guidance get in touch and we will try and point you in the right direction

Good luck!

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01652 240554

CERT Consultancy

Waters Edge Business Centre

Maltkiln Road

Barton upon Humber

DN18 5JR

England