Voluntary Sector North West 14 November 2013

Social Lenders in the RegionCharity Bank has worked in Partnership with several,

including:

• Key Fund

• Big Issue Invest

• Cooperative & Community Finance

• Social Investment Business (SIB)

• Unity Trust Bank

• For a full list go to CDFA website

• www.cdfa.org.uk

What is Charity Bank?

• A Social Bank – not a contradiction in terms!A Social Bank – not a contradiction in terms!

• To lend to not-for-private-profitsTo lend to not-for-private-profits

• A fully regulated bank which grew out of Charities Aid A fully regulated bank which grew out of Charities Aid Foundation 15 years ago.Foundation 15 years ago.

• We have offered £185m+ to over 1030 organisations We have offered £185m+ to over 1030 organisations for projects costing £375mfor projects costing £375m

• Nationwide coverage with a regional structure.Nationwide coverage with a regional structure.

• We use 100% of our customers deposits to support the We use 100% of our customers deposits to support the sector.sector.

• We do not borrow from the money marketsWe do not borrow from the money markets

Charity Bank LoansWho we lend to: must be “not-for-private-profit”

• Registered or exempt charities• Companies limited by Guarantee• Community associations/CICs/IPSs/Coops• Unincorporated voluntary organisations

We will consider all requests as long as the purpose of the loan has a social / charitable outcome.

Loan details• From £50,000 up to £2,000,000• Loan Term 6 months to 25 years

Current PrioritiesIn the current economic context, we will look to give priority

to organisations where:

• The organisation is seeking to invest in new income-generating activities to perhaps reduce grant dependency

• high social impact is anticipated as a direct result of the loan.

• The organisation making the request is unable to borrow money from other sources.

• Long term asset financeLong term asset finance• Short-term working capitalShort-term working capital• Bridge Grants - payment before Bridge Grants - payment before

receiptreceipt• Invest in income generating projectsInvest in income generating projects• Buy equipment & vehiclesBuy equipment & vehicles• Buy property (cheaper than renting?)Buy property (cheaper than renting?)• ““Last brick” in fund raising campaignLast brick” in fund raising campaign

What can you use a loan for ?What can you use a loan for ?

How much will it cost?

• Interest rates will vary between 5% and 8.5% dependent upon the size of the loan, its purpose, risk, and the term for repayment. Mostly fixed rates so you know what to budget for.

• An up-front arrangement fee of 1% plus legal expenses

• No penalties for early repayment of all or part unless refinanced within the first 2 years

What do we look for?• The social impact of the organisation: what will happen to the

surpluses?

• Business plan including financial projections.

• Evidence for the reliability of income streams and the ability to repay us: track record or evidence for assumptions

• Good governance structure & the right people with appropriate spread of skills and experience

• Risk Assessment or Register evidencing a system of planning that takes account of the risks the organisation faces and how it will deal with them

Where are the Gaps?

• North & East Greater Manchester: Bolton, Oldham• Central Lancashire: Preston, Chorley• Parts of Greater Merseyside: Halton, Knowsley• Cumbria: South West & West: Barrow, Whitehaven and

Workington

Case Study 1: Heron Corn Mill(not breaking confidence: all agree to share)

Heron Corn Mill, South CumbriaA mill has existed on the site since 1069 and it is now home to a visitors’ centre forarts and education, alongside the River Bela. To become moreenergy-efficient and createadditional income, a Kaplan turbinehas been installed, loan of £178Kover 17 years (because of ROCs)towards £505K costs.

Also currently bridging HLF grant.www.heronmill.org

Case Study 2: Farfield Mill, Sedbergh

• Old Victorian Textiles Mill• Restored in 2001 with loans

of £220K• Further loans totalling £28K

to develop

Social Enterprise Income

Streams from weaving,

Bistro, & Hydro Scheme• Arts Centre• Heritage Exhibitions

www. Farfieldmill.org

Case Study 3: Rural Social HousingLyvennet Community Trust, Eden Valley,

Cumbria• Community Land Trust in

the village of Crosby Ravensworth

• Housing had become

unaffordable to locals

• 2008 Housing Needs Survey

• 12 affordable housing units &

8 plot sales & 2 shared ownerships to raise £800K

• Development Cost £2M: HCA £660K: Other grants £50K; Loan Finance £1.475M reducing to long term loan of £500K

Case Study 4: East Lancashire Deaf Society, Blackburn

Loan of £600K for £2.5M:

Partnered with BII & CCF

Community, Regeneration, Training & Employment & Social Care

office accommodation, restaurant,

social care services, creche &

nursery, for the profoundly deaf

community and their families.

King’s Court Blackburn, a listed

building, former Council Chambers.

One request please........

• Make contact the earlier the better! We can often add value and help in other ways by connecting you with other partners and funders. Eg Key Fund or Big Issue Invest for feasibility phase, or other grant providers

• Having lent already we are developing a knowledge of

the issues and can steer you towards advice as appropriate.

Simon Thorrington ACIBTelephone: 07979 644872

email: sthorrington@charitybank.org

Registered Office: The Charity Bank Limited, 194 High Street, Tonbridge, Kent TN9 1BE. Registered in England and Wales No. 4330018. Charity Bank is authorised and regulated by the Prudential Regulation Authority.