A £30 million loan fund has been reconstructed because of lack of interest from the small and medium-sized social ventures who were targeted as borrowers.
We underestimated how hard it was to get deals done
The Third Sector Loan Fund, was launched in 2014 by Social and Sustainable Capital and backed by Big Society Capital, Santander Bank, and Social Investment Business, to encourage commercial banks to finance charities and social enterprises.
Only 10 of 350 applications to the fund have been approved, and only two deals completed.
The problems: lending terms, lack of collaboration between investor and investee, and unclear deal-making requirements, along with austerity measures in the U.K. that have cut revenues from public sources.
Jessica Pothering is a writer at ImpactAlpha and editor at Demand by ASME.
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