For the charities and social enterprises we support, it has been another really tough week. Many are racing to protect their staff and preserve their business. We have seen inspiring leadership stories across our portfolios, like June O’Sullivan at the London Early Years Foundation. Her story illustrates the range of pre-emptive actions many are taking to try and survive this crisis. As with many of you, we are in active discussions with government on the range of the additional support that will be crucial and hope to have further announcements in the days ahead.
Two weeks ago, we set out our three priorities for how we would respond and want to keep you updated:
Our newly launched hubs on the Good Finance website and our Information page for social investors have been viewed over 6,500 times in the last week. We are hearing that our COVID-19 support guide for charities and social enterprises has proved particularly useful. We’ll keep these hubs updated as new schemes emerge.
Adjusting existing funding
We have adjusted our funding arrangements so that all lenders across our portfolio are now offering capital and interest rate holidays where appropriate - in addition, many of our loan managers are already offering short-term bridge loans. These actions will impact loan managers’ own liquidity, so we are considering what additional finance will be needed from us to support them.
Beyond our lending funds, we are engaged in active support work across the rest of our portfolio. In social venture, a tougher funding environment is already emerging and our own commitments will be constrained as we aim to make emergency liquidity available. Last week we re-confirmed a £3 million three-year commitment to Bethnal Green Ventures (BGV) and waived our co-investment requirement for the first year - to enable BGV to continue to run its leading accelerator and invest in tech for good through this period. Some BGV ventures are already leading the response to COVID-19, such as DrDoctor rapidly scaling its platform in the NHS.
Exploring new funding
We recognise that many social enterprises and charities need urgent grant support at this time and we are collating links to emerging schemes on our Good Finance hub while supporting calls for wider grant support. However, where we can help most is when they face a short-term cash crisis around working capital and need flexible loans that they can access easily. The Government’s new Coronavirus Business Loan Interruption Scheme (CBILS) was launched last Monday and is available from mainstream banks – and we encourage organisations to contact their bank for loans first. Social lenders in our portfolio support many enterprises who are unable to access mainstream bank finance, and we are targeting two routes that can connect the CBILS scheme to them:
- A centralised facility for social lenders capitalised by Big Society Capital to offer CBILS emergency loans to charities and social enterprises
- Ensuring our Community Investment Enterprise Fund which targets lending in deprived areas can work effectively with CBILS to provide emergency loans
We hope to announce more details on these later this week.
This crisis is a health emergency but also threatens the future of some of the charities and social enterprises which support the most vulnerable in society. That’s why we have joined with foundations and charities to call on the Government to help with a wider support package for the sector. It is also why we are beginning now with partners and sector experts to plan beyond this emergency phase as to the role investment could play to help rebuild this vital part of our society.