Arts organisations are being invited to apply for loans from a new £7m loan fund set up with support from the Cabinet Office.
The Arts Impact Fund, which will be opened for applications next month, will offer loans of between £150,000 and £600,000 to arts organisations in England that need additional finance to grow.
The pilot scheme has been created and funded by the innovation charity Nesta, the grant-maker the Esmée Fairbairn Foundation and Bank of America Merrill Lynch, with support from the Arts Council England and additional funding from the Calouste Gulbenkian Foundation and the Cabinet Office.
A joint statement from the organisations involved said it was the first fund of its kind that brought together public, private and charitable investment to support arts organisations.
Organisations that wish to apply will need to demonstrate the need for the money, what they would use it for and how they would repay it.
Successful organisations should be working to make a difference in at least one of the following areas: youth and educational attainment, community and citizenship, or health and wellbeing.
Those receiving loans will probably have to pay interest of between 4 and 7 per cent a year on loans that will typically last between three and five years.
Among the aims of the fund are to demonstrate that social finance can be effective for arts organisations and to establish the fund mechanics, metrics on loss/default rates and returns to help determine whether a larger follow-on fund should be set up.
A Nesta spokeswoman said that a breakdown of the levels of funding provided by each contributor was not available at this stage.
Rob Wilson, the Minister for Civil Society, said: "As part of this government’s long-term plan for the economy, social investment plays an important role by unlocking finance to help charities and social enterprises do more. We believe that the Arts Impact Fund and this pioneering new model is just the start, and we want to see it scaled up and replicated in other sectors to address a range of social challenges."
Applications will be opened on 15 April and successful applicants will be announced every six months over a two-year period.
For more information on the fund, click here.