A social enterprise that provides construction jobs for ex-offenders in Bristol plans to raise £3m by means of a bond to develop its model in the midlands.
Bristol Together, a community interest company, raised a total of £1.6m through a bond in two tranches and used the money to buy and renovate seven properties in the city. It plans to sell these at a profit and buy more homes to refit. It has employed about 35 ex-offenders in the process and has been trading for 18 months.
Paul Harrod, the social entrepreneur who created the company, is trying to replicate the model by creating a new community interest company, Midlands Together. This will issue a £3m, five-year bond, paying between 4 and 6 per cent a year. Both companies are owned by the Together Group, which will try to set up more enterprises in other parts of the country if the midlands model is successful.
The social lender Triodos Bank, which is working on the new bond, said it would attract community investment tax relief, making it worth potentially more than 15 per cent a year for top-rate taxpayers.
The CIC will use the money to buy about 15 homes in need of refurbishment and repair each year, employing up to 150 ex-offenders to fix them. The homes will then be sold at a profit and used for further property purchases.
Dan Hird, head of corporate finance at Triodos, said he was confident it would appeal to investors.
"We believe the investment will appeal to charitable trusts, housing associations, corporates and other sophisticated investors who want to be part of the solution to breaking the cycle of re-offending in a sustainable manner," he said.