Last Monday the FT revealed the government was planning a replacement for its emergency Covid loans programme with a state-backed guarantee to enable banks to lend to businesses during the recovery (Report, December 14).
This is very good news, but it is vital that this critical support is not limited to businesses but can also be accessed by charities and social enterprises. Covid-19 has exacerbated social challenges from homelessness to unemployment and these organisations are vital to tackling these, and to rebuilding our social fabric.
The government should ensure that lessons are learned from the implementation of the initial guarantee during the crisis.
Big Society Capital and Social Investment Business set up a £25m fund backed by the government guarantee which has provided loans to 50 social enterprises and charities which struggle to access finance from mainstream banks. They range from a national charity helping blind and partially-sighted children, to a local charity finding accommodation and training for homeless people, and a social enterprise providing nursery care in disadvantaged areas.
We urge the government to ensure that there is sufficient flexibility in the new loan guarantee scheme so that it can still be used by social lenders to provide loans to organisations that are providing these vital public services.
By using the specialist expertise of such investors, we are confident that not only will the loans be paid back but also that the guarantee will help support the people and communities that need it most, with associated savings for the public purse.
Sarah Gordon
Chief Executive, Impact Investing Institute
Matt Smith
Chair, Social Investment Forum
Stephen Muers
Chief Executive, Big Society Capital
Nick Temple
Chief Executive, Social Investment Business
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December 21, 2020 at 07:01AM
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Letter: Social enterprises deserve Covid loan support - Financial Times
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