A new £30m fund has been launched today to help provide commercial finance for social enterprises and charities.
The Third Sector Loan Fund provides social ventures with loans of £250,000 to £3m to help deliver better services and create new jobs. Santander has invested £13.5m, thought to be the biggest single investment by a mainstream UK financial institution into a third party fund lending to social ventures.
Chancellor George Osborne said: ‘With social investment, we’ve got a great idea that uses the power of finance to tackle some of the most difficult social problems. It is one of our priorities as a government, and an area in which Britain leads the world.
‘Investment into social enterprises can play an important role in our long-term economic plan as well as in addressing the toughest social issues.’
The fund aims to address the shortfall in financing for social enterprises, estimated at up to £1bn a year.
Nick O’Donohoe, CEO of Big Society Capital, said: ‘This fund is ground-breaking for social investment. It shows that, with creativity and commitment, banks such as Santander can find a way to meet both their commercial requirements and do more to support charities and social enterprises.
'This is an important milestone in unlocking finance from mainstream financial institutions and exactly the sort of thing we want to use our investments to enable.’
The Third Sector Loan Fund will run for 10 years and will monitor the financial performance of the investment and the impact it makes.
