FINANCE NEWS: Triodos in linkup with grant trust

Charity sector bank Triodos has agreed a unique partnership with grant-making trust the Chase Charity to loan £500,000 of the trust's capital to groups that fit with its social remit.

Under the terms of the deal, the money will only be lent at a fixed rate of interest to charities that help provide homes for vulnerable groups.

Homes for Homeless People, a Luton-based charity providing accessible information to help homeless people find services, will be the first organisation to benefit from the venture. A second loan is in the process of being finalised.

Peter Kilgarriff, director of the Chase Charity, said: "Increasingly charities are using investments in different ways. We wanted to explore new ways of making our money work and the trustees have long recognised the difficulty that vulnerable groups have in obtaining homes.

"We investigated a range of options and are delighted that the Chase Charity and Triodos Bank have been able to produce a new model that will make a real difference to hundreds of people across the UK."

Triodos will actively seek charities that fit with Chase's aims from among its existing clients as well as following up referrals.

"We have more than 20 years' experience of working with a range of charities,

said Triodos' loan manager Sue Cooper. "Our knowledge of the sector will enable us to identify a series of projects for Chase's money to support. We also have a reputation in the marketplace. People come to us looking for something different.

The risk decision - whether to loan or not - will be entirely Triodos' responsibility.

Triodos' conventional lending is linked to base rates and the bank charges a margin above base rates. But for the Chase initiative, all loans will be tied to the same rate of interest for the duration of the loan - three or five years.

"The initial period of a loan can be crucial to a charity's finances and this new programme offers a fixed rate of interest during what can be a difficult time," said Cooper. "For organisations that are doing something slightly different, they need to know exactly what the financial commitment is.

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