At the Growth Impact Fund, we offer loans to organisations that are impacting inequality in the UK. Before we get into the details, first let’s touch on what exactly a business loan is and what it could mean for your social purpose organisation (SPO).

What is a Loan?

A loan is basically when one party (in this instance, Growth Impact Fund) gives another party a sum of money with the understanding that they’ll pay it back. In some cases, the lender adds interest or finance charges to the initial value, which the borrower must repay. For lots of SPOs debt can seem scary, but it doesn’t have to be.

At Growth Impact Fund we give loans of between £500,000 — £1,500,000 to any type of SPO (charities, limited companies etc). Our loans are for a period of between 3–7 years and we charge an interest rate between 8%-12% of the loan amount. Because of the nature of loan investment, our loan offer is for SPOs with 3+ years of trading, and generating a cash surplus.

We don’t require security for our loans — often other lenders will require that an organisation put up a building they own for ‘security’ i.e. they would lose the building if they didn’t pay the loan back. We don’t think that is very fair and would never ask that a director or trustee of a charity risk their own home for a loan.

Why should you consider loans?

Before considering a loan, it’s really important to consider and know how you might benefit from a loan vs another type of investment. Some key benefits of a loan compared to other kinds of investments are:

• Loans are unrestricted. Most businesses know how to best spend their money, but systems like grant funding that place conditions on investment can make things difficult. Loans operate differently, once you have the loan and the terms have been agreed, you choose how to spend the money. We’ll also give you a dedicated investment manager throughout your loan period so you’re never on your own.
• The Growth Impact Fund offers more than money. Diversity, Equity and Inclusion (EDI) is integral to our work on the Fund, and we’ll offer you expert guidance and a network of aligned peers to help you improve your EDI wherever you are in your journey.
• We have no security requirements for SPOs who want to take out a loan. Some loan agreements require you to secure something against a loan e.g. a building. At Growth Impact Fund, we don’t need any of those things.

What’s next?

If you’re interested in investment from the Growth Impact Fund visit growthimpactfund.org.uk to learn more and register your interest. You can also email [email protected].