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4 things you need to know about social investment loans

While every organisation and social investment loan is unique, there are several questions that our team is often asked by social enterprises who are considering loan funding. Check out the FAQs below to understand whether a loan from SIS could benefit your organisation.

Who can apply?

 In short: Social enterprises, charities and incorporated community groups in Scotland.

To apply for a social investment loan through SIS, you should be able to answer ‘yes’ to the following three questions.

  • Are you a social enterprise, charity or community group with an “asset lock” in place?
  • Does your organisation carry out income-generating activity?
  • Are you based in Scotland?

If you’re unsure about any of the above, please don’t hesitate to get in touch to find out more.

How do you apply for a social investment loan?

In short: Simply get in touch.

At SIS, we don’t believe in long-winded application forms or unnecessary documents. We want to hear about the social or environmental impact that you’re making (or hope to make), as well as your plans for the future and the support you will need. Whether it’s over the phone or via email, it all starts with a conversation.

Once we’ve established that social investment is the right path for your organisation, we’ll likely ask you to share any business plans or cash flow projections that you may have to help us better understand your business. Don’t worry about getting a professional to tidy things up – we’re happy to look over what you already have and advise if you need to develop anything more.

Do Trustees have personal liability for the loan?

In short: No.

While Trustees will likely have liability in terms of how they operate the organisation, there is no personal liability for Trustees on investment secured through SIS. We provide loans  based on the legal entity and the ability of the organisation to repay the loan, not on any individual behind it. In some instances, we may take security, but this security would be on the assets of the organisation as opposed to any individual party.

What should the business plan look like?

In short: The contents of the business plan should be proportionate to the amount of money you’re looking to borrow.

The larger the loan you’re hoping to secure, the more detail you should include in the business plan. At SIS, we’re not looking for a ‘perfect’ business plan, but we do expect a clear and concise overview of the following points:

  • What your organisation does
  • What the social or environmental impact of your work is
  • Who your customers are and any contracts that you may have secured
  • How much investment you’re looking for
  • What difference the investment will make
  • Other funding that you have secured or are exploring
  • The organisation’s governance structure and associated skillset
  • What the potential risks may be

The above FAQs address many aspects that an organisation should consider when taking on social investment loan funding. We know it can be daunting, so please reach out to our team here if you have any questions or would like to explore how SIS can help you achieve your impact aspirations.