FINANCE NEWS: Adapt secures £2.15m bank loan

Mathew Little

Drug treatment charity Adapt has taken out a £2.15 million loan from Unity Trust Bank, the largest the trade union-owned bank has ever given to a charity.

The money will be used to refinance Adapt's current debts with other lenders, to develop new services in drug treatment and to expand the organisation's fundraising activities.

Adapt is the UK's third-largest agency treating drug addiction. It has residential detox and rehab centres in Bristol and Norfolk, and also runs services for seven prisons in East Anglia.

Brian Arbery, chief executive of Adapt, said the loan was needed because of the inconsistent nature of statutory funding. "We have encountered cash flow problems - in common with all other charitable organisations in our sector - because of the complex way that residential addiction treatment is funded in this country," he said.

"I am certain that in the future the funding system will work far better because of the Government's new National Treatment Agency. However, we needed assistance in the short-term and our existing finance providers simply refused to take the long-term view."

Adapt had previously invested with a mainstream and an "ethical" bank, but said neither had been responsive to its needs. "The mainstream bank wanted to get out of the sector, and the ethical bank couldn't take a wider view," said Arbery. "We had cash flow problems but long-term income, and we expected them to respond in a helpful way. But we were continually held back."

This is not the first time that Adapt has used loan finance to expand its work. In 1990, the charity borrowed £1 million to set up a drug treatment centre at Barley Wood, near Bristol, becoming the first charity in the residential healthcare sector to develop services through commercial finance.

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