Some of the UK’s largest charities and social enterprises have written to Chancellor Rishi Sunak urging him to help them avoid a funding crunch after the end of the Government’s Covid-19 loan program at the end of March.

The groups, which include the Joseph Rowntree Foundation, The Big Issue and the National Council of Volunteer Organizations, told the Chancellor that funding was the number one and most pressing issue facing the charitable sector.

The letter warns that without a successor regime to the Coronavirus Business Interruption Loans Scheme (CBILS) that maintains the exemption of creditworthy charities from the requirement to show that more than 50% of income comes from business activity, many will not be able to access loans.

Charities risk collapsing without continued support from Covid

This, the organizations say, could result in the loss of several thousand jobs in the sector and leave the poorest and most vulnerable in society without support and dozens of supportive organizations facing the prospect of collapse.

The letter to Mr. Sunak states: “Unlike conventional companies, they [charities and social enterprise groups] in the face of a double whammy of growing demand and falling incomes.

“The government should work with social investors, who disproportionately fund organizations in disadvantaged areas, to provide accessible and affordable funding solutions.

“While charities, social enterprises and community businesses have shown remarkable resilience during this crisis, they generate fewer surpluses than traditional SMEs and will therefore need financial support tailored to their business models. specific. “

Groups cannot afford commercial loans

The letter also calls on the government to avoid an interest rate hike on any future Covid support loan to charities, stating that “their business models can only afford interest rates below 10%.”

The letter adds that without continued access for more social lenders to obtain British Business Bank guarantee accreditation or guarantee allocations available for the sector, the scale and scope of the financing rollout in the charities, social enterprises and community businesses will be limited.

A total of 33 charities, social enterprises and community businesses signed the letter.

To ensure that charities, social enterprises and community businesses can access CBILS guarantee loans during the crisis, Big Society Capital and Social Investment Business set up a £ 25million fund called the Resilience and Recovery Loan Fund. .

To date, it has enabled a network of social lenders to approve more than £ 16.7million in loans to more than 50 groups that would not otherwise have been able to access it.


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