Venturesome considers new charity loan services

Venturesome, the lending arm of the Charities Aid Foundation, is planning to offer two new loan products - a form of 'patient capital' and a service to underwrite charities with strong balance sheets.

Loan rangers: members of Women Like Us, one of the charities helped by Venturesome
Loan rangers: members of Women Like Us, one of the charities helped by Venturesome

Joe Ludlow, Venturesome investment manager, told Third Sector that it was looking at providing loans at a fixed rate of interest with no set repayment date.

"We could lend £100,000 to an organisation for five years, then they could choose whether or not to repay that debt," Ludlow said.

"We could then decide whether we'd like to sell the original debt on, to get the capital back to invest in something else."

Venturesome is also exploring the possibility of a "super low-risk fund" that would underwrite charities with strong balance sheets, allowing them to pay a small amount for the right to take out a loan whenever they choose.

Ludlow said that Venturesome would also be interested in talking to charitable foundations about how they can offer similar products.

"Foundations offer grants for core services, but charities also need working capital and funders are often more reluctant to provide money for this," he said.

The Esmee Fairbairn Foundation is one grant-making organisation working with Venturesome on the scheme.

Dawn Austwick, chief executive of the foundation, said: "We're interested in finding the right financing for each charity, so we've got both the patient capital and low-risk fund ideas under consideration at the moment."

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