The voluntary sector loan fund, which split from the Charities Aid Foundation three years ago, has seen deposits in its relaunched Community Investment Tax Relief account rise significantly.
Non-audited figures from Charity Bank show that its balance sheet grew from £18.64m in December to £36.45m in July, as both individuals and companies flocked to the government-backed CITR account, which offers a tax rebate.
The £25m will be invested on the UK money markets while new lending is agreed. But Charity Bank says it is confident there is enough demand in the sector to utilise the money.
Loan proposals worth £1m a month are currently being put before the bank's credit committee.
Malcolm Hayday, chief executive of Charity Bank, said loan finance would become more important for the sector as money for grants was squeezed.
"Over the next few years, many charities are increasingly going to face funding issues," he said. "They will start to see government funding reducing, so they will need to think about alternatives if they want to continue operating. We want them to think about that now because we have money we are happy to lend."
He said the bank was particularly looking to lend more in deprived areas of the country. "That's where I want our field officers out and working," he added. "But we are keen to help any organisation that is financially excluded."
Under the Government's CITR requirements, money must be invested in communities or groups of people that suffer disadvantage. Hayday said 70 per cent of Charity Bank's lending matched these requirements.
In the meantime, deposits in the CITR account have been suspended until January 2006, as the bank's current lending is fully funded.
Since the 1996 launch of Charity Bank's pilot scheme, Investors in Society, £31m in loans has been agreed for 430 charities and community groups.
These include the Sustainability Centre, a project run by the Earthworks Trust in Hampshire to provide the local community and volunteers with training and information on sustainability. In the past seven years, the centre has received £110,000 in loans from Charity Bank.
"Unlike many funders, we have no quotas and no windows," said Hayday.
"We lend responsibly where we think our depositors' money can have the most impact."
- Charity Bank is to make £25m available for new loans to voluntary bodies
- Non-audited figures show that the bank's balance sheet grew from £18.64m in December to £36.45m in July
- Loan proposals worth £1m a month are currently being put before the bank's credit committee
- Malcolm Hayday, chief executive of Charity Bank, said 70 per cent of its loans met the Government's CITR requirements
- Since its launch in 1996, Charity Bank has agreed £31m in loans to 430 voluntary organisations.