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Social What?

Social What?. Social Investment is an investment that is made in a third sector organisation with the

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Social What?

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  1. Social What? Social Investment is an investment that is made in a third sector organisation with the expectation of both a financial and a social return, where the financial return is at the very least the repayment of the capital amount (but more often than not with interest as well) and the social return measured using a series of indicators.

  2. Who is SIS? • We are a social enterprise and registered charity in our own right i.e. We reinvest / recycle money to further support the development of the third sector • Supported almost 200 3rd sector organisations in investments totalling just under £43 million • We are the largest not for profit provider of business loans to the third sector in Scotland • Our aim is to connect capital with communities by offering flexible loans that are specifically tailored to the third sector organisations

  3. Why Social Investment? • Investing in your mission • For the amount you need • Whenyou need it • Hidden costs of grants e.g. time taken to source and report

  4. Social Investment: some examples • Aberdeen Gymnastics Trust • £35k all purpose loan to allow for the purchase of a range of high quality equipment • Foxlake Adventures • Scotland’s only cable wakeboard park, £40k all purpose loan to assist with working capital. • Just trading Scotland • Short term bridging facility of £8,000 to assist with the purchase of stock after receiving purchase order for jams / chutneys from Oxfam worth £27,000 • The Centre of Therapy and Counselling Studies • Provides Cognitive Behavioural Therapy sessions. Loan of £100k over 10 years; Triodos provided £350k over 25 years

  5. Our work with Resilient Scotland • We have worked with Resilient Scotland in supporting the Start & Grow Fund, and are now partnering with Making Enterprise Happen • SIS provides our due diligence and financial expertise to the Making Enterprise Happen process

  6. MEH : Who is eligible • We will invest in third sector organisations that have the capability to make sustainable social impacts. • These must… • be based and operate in one of the 13 eligible areas • operate within the Scottish Third Sector i.e. charities, • community/ voluntary organisations, non-profits, social enterprises • reinvest their profits for their communities benefit • be allowed to borrow under their organisation’s constitution

  7. MEH: A Step by Step Guide • Step 1: Are you permitted to borrow? • Check your constitution • Step 2: How to apply • Expression of Interest • Step 3: Legal Process and Documentation • Including loan agreement (`Facility Letter’) • Reporting requirements • Step 4: Security may be required • Against Property and / or Floating Security

  8. MEH: What we will do • We will work with you to put together the most suitable • finance package. • Information we may need; • business plan; • last three years annual accounts; • up to date management accounts; and • any cash flow forecasts/projections. • Each successful proposal will be provided with full details of the terms and conditions plus a legal facility documentation to be signed. • Confused by jargon? Just ask!

  9. FAQs • Can I have another lender? • What happens once the investment is in place? • What is a Financial Covenant? • What if it goes wrong?

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