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SIS Community Shares Loan provides underwriting support for share offers

In collaboration with Community Shares Scotland, we provide loans to organisations raising funds through a community share offer.  This will enable organisations to progress their projects in the event that the share offer does not raise sufficient funds.

The community share loan will allow projects to be started even if not all of the money needed has been raised through the issue of shares, based on the knowledge that investment funding has been raised to make up the difference. During this process, the share offer can remain open.

A SIS funding commitment will provide confidence to potential investors in the share offer that the project will go ahead. Given SIS’ excellent funding track record, investors will also take comfort in the due diligence undertaken which will provide increased investor confidence

Further to this, SIS will provide ongoing business support and advice to the organisation through a dedicated named Investment Manager for the duration of the loan.

Key details of the community share loan include:
  • Fixed annual interest
  • A maximum term of 10 years.
  • The loan can be interest only for up to 18 months. This interest can either be paid or deferred, followed by equal payments of capital and interest over the remaining loan term.
  • The loan can be repaid from income generation or through subsequent share issues. There are no fees or penalties for early repayment.
  • SIS loan can be involved alongside commercial loans.
  • There must be a minimum value of shares committed before SIS loan can be drawn and this will be agreed on a case by case basis depending on the target. This is not a bridging facility.
What are the benefits to the community?

The community share loan will allow projects to be started even if not all of the money needed has been raised through the issue of shares, based on the knowledge that investment funding has been raised to make up the difference. During this process, the share offer can remain open.

A SIS funding commitment will provide confidence to potential investors in the share offer that the project will go ahead. Given SIS’ excellent funding track record, investors will also take comfort in the due diligence undertaken which will provide increased investor confidence

Further to this, SIS will provide ongoing business support and advice to the organisation through a dedicated named Investment Manager for the duration of the loan.

Case Study

Portpatrick Harbour needed to raise £75,000 in a very short period of time to secure the community’s ownership of the harbour. SIS were able to provide the necessary amount at short notice to allow the sale to continue. The community raised the full amount in record time and have since gone on to run a successful community enterprise and take on further assets. Read more on their story here.