FINANCE NEWS: Triodos pursues loan applicants

Triodos Bank is seeking loan applications from charities and social enterprises after raising £3m in only two weeks for its new community investor account.

The account, which is now fully subscribed, will channel savings into loans for charities or enterprises working with disadvantaged groups or based in deprived areas.

"We had an amazing response from savers to the account, which is partly because it offers extra tax relief and also because it offers a social return," said the bank's communications manager, James Niven.

Investors in the account, which is currently paying 2.1 per cent interest, will benefit from the government's community investment tax relief scheme.

As long as they leave the investment in the account for five years, they gain tax relief worth 8.33 per cent gross to higher-rate taxpayers and 6.41 per cent gross for basic-rate taxpayers. Around 50 individuals have invested in the account.

Triodos managing director Charles Middleton said: "In a climate of low interest rates and growing interest in ethical investment, the account made sense to hundreds of people. The challenge now is to lend the same money to the organisations and enterprises that need it most."

Triodos has already made its first loan from the account, to Bristol-based educational charity the Award Scheme Development and Accreditation Network (Asdan).

The bank is now actively looking for other charities that could benefit from loans. Individual loans cannot exceed £250,000 and will need to be secured with property or guarantees.

Niven said: "Now that we've raised the money, we're keen to lend it.

We think there are many organisations that would be interested, such as smaller borrowers that find it hard to raise money from high street banks.

We offer prospective borrowers our expertise in the not-for-profit sector."

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