Investing in Enterprise Fund
|Investment size||Up to £250,000|
All of Scotland
|Applications:||Enquire any time|
About this fund
The Investing in Enterprise Fund offers blended grant and loan investment to social enterprises, community organisations and charities working across Scotland. The fund can invest between £10,000 and £250,000 per organisation; up to 25% (£62,500) of this can be in the form of a non-repayable grant and the remainder a repayable loan.
The investment can be used for:
- Working capital
- Acquisition of assets
- Business growth
- Capital expenditure
Most importantly, the fund is designed to allow you to meet the needs of your business, achieve your vision and secure your future.
Loans are repayable over a 10 year period. Appropriate security must be available for the loan. We will discuss our requirements for security with you during the assessment process.
Purpose of this fund
Investments made by this fund must demonstrate that they meet our social investment charitable objectives, which are:
- To prevent and/or relieve poverty among those living in Scotland
- To advance community development, and urban and rural regeneration, in Scotland
- To advance education in Scotland
Who can apply?
Please visit our Investing in Enterprise eligibility criteria page.
What can’t be funded?
This fund cannot support:
- Businesses that are insolvent or at the immediate risk of insolvency
- Proposals that are merely to replace existing debt finance
- Subsidiaries of public bodies
- Proposals capable of being fully funded on a commercial basis
- Proposals that promote religious practices or beliefs
- Schedule 3 Community Interest Companies.
How are decisions made?
Decisions on successful applicants will be made by Foundation Scotland Social Investment Committee. Decisions on applications are generally made within a 12-week timescale.
The interest rate is 6%. This is fixed for the term of the loan.
Yes, all Investing in Enterprise investments are at least 75% loan.
Why do we have to provide proof that we have not been able to secure lending from a bank or other commercial lender?
Investing in Enterprise aims to fill the gap that exists in funding for organisations seeking to move into debt finance but unable to secure lending from a bank. If you have questions about what this means, or what constitutes a refusal, please contact us to discuss. We may waive this requirement for smaller investments.
All potential investments will be reviewed to ensure compliance with UK Subsidy Control regulations. Further guidance will be provided to organisations whose proposals progress to the next stage, but we recommend that applicants seek independent advice. Applicants are required to inform us if they have already received funding that is considered to be UK subsidy control (this could be in the form of grants or subsidised loans).
We are not currently accepting applications from CIC Schedule 3 companies because of the possibility that they may generate financial benefit for individuals, such as shareholders and investors. This is not compatible with the charitable aims of the fund. We are constantly reviewing our eligibility criteria and will update the website and FAQ’s should this situation change.
There are no arrangement fees or legal fees in the normal course of making the loan and grant. There is a cost to drawing up and registering the security for the loan and any ranking agreements that may be required; this cost will be deducted from the grant. You may wish to take your own legal advice before signing the loan and security documents, and this may incur a charge. In some cases, where particular conditions are imposed, the applicant may have to seek independent legal or other advice and this may incur a cost.
Yes, but we will ask to see the Terms & Conditions that apply to other loans, so we're aware of any restrictions or conditions that other existing lenders may have imposed in case they affect the terms of our investment. We also ask that you inform us if you intend to take on any new debt funding during the Investing in Enterprise loan term.
If there are unsecured loans in the company from Directors or other individuals, we may ask for a Letter of Postponement to give us comfort that the repayment of the Investing in Enterprise loan will be given priority. This prevents organisations from using the Investing in Enterprise investment to repay other existing debts.