Charities and other social sector organisations can apply for loans of up to £1m from a scheme supported by £10m of investment from Big Society Capital.
The FSE Group, a community interest company that invests in small and medium-sized enterprises, today launched the Social Impact Accelerator loan scheme, which will provide flexibly structured loans of between £250,000 and £1m to help regulated social sector organisations expand.
Loans are available to enable organisations to become more effective and improve their financial resilience. FSE said it wanted to support strategies that will deliver a "step change" in the organisations.
Examples of what the loans are available for include capacity building and expansion initiatives, such as investment in staff, marketing, product development and deposits for strategic asset purchases.
The scheme is open to charities registered with the Charity Commission or the Office of the Scottish Charity Regulator, wholly owned subsidiaries of charities, community interest companies and industrial and provident societies that are community benefit societies.
Nick O’Donohoe, chief executive of Big Society Capital, said: "This investment is an important step in ensuring a variety of finance is available to social sector organisations, including those that do not qualify for traditional secured lending. FSE’s experience in fund management, and increasingly in specialising in social investment, leaves it well-placed to maximise the impact of our investment."
Kevan Jones, chief executive of FSE, said: "This initiative is a core component of our wider strategy to provide funding and support services to help organisations achieve their social, economic and financial potential. Our plan is to expand the access to medium-term finance for the social sector beyond the constraints of traditional lending criteria. We aim to increase the scope of organisations able to access finance and the range of propositions able to be financed."