Funding Packages

There is no overall template for investment packages - they will be flexible financial solutions right for individual organisations within the broad parameters of the Fund's investment strategy. However, all investment packages will contain an element of loan finance on average, likely to be at least 50% of the total investment provided by the Fund.  Investments will range from a minimum of £100,000 to a maximum of £1,000,000.

Investment packages will be structured in accordance with an approach that seeks to strike a balance between on the one hand, optimising the blend of financial and social returns generated by SIF investments, and on the other, avoiding the imposition of an unduly onerous repayment programme on the organisation seeking investment.   SIF will seek to fulfil funding requirements by providing financial products in a sequence that will consider in turn :-

Loan Funding

This is a key element of all investments and the organisation's business plan, including financial projections, will be assessed for loan first before consideration is given to any non-repayable investment. The loan will be provided by the fund or if appropriate, by a third party such as a strategic banking partner.  Interest rates will vary from case to case but loans from SIF will be provided at rates slightly lower than equivalent market rate and fixed for agreed periods during the life of the loan.   Loans provided by strategic banking partners will be priced at prevailing commercial rates.

Loans from SIF will start at £50,000 and apart from the investment limits of the fund, there will be no cap on the maximum level other than the amount the organisation could service and repay.

Other Financial Products

The funding package could also include new financial products for the social economy which have  many of the characteristics of risk capital.  These could take a number of forms dependent on the legal structure of the organisation seeking investment, but in most cases will involve a mix of repayable and non-repayable elements tailored to the needs of individual organisations.

Strategic Investments

Strategic Investments are non-repayable.  However, they will be linked to identifiable social, economic, and environmental outcomes.  The outcomes would be agreed at the beginning of the investment period and monitored to ensure that they were delivered as projected during the term of the investment.  Strategic Investments will comprise a maximum of 50% of any funding package.

Development Support

As well as providing financial  support as detailed above SIF would also, where required, pay for development and business support for organisations. This could include advice and support on marketing, human resources, accountancy or legal aspects. It could include business advice and support on growth management and financial sustainability. It could also include mentoring support and leadership training from mainstream businesses or other third sector organisations.