The Fund can support an organisation that plans to increase its turnover and would need an investment between £25k and £150k. Preference will be given to organisations who haven’t had previous experience of commercial or social investment.
We define a recovery enterprise as an organisation which:
- Is run by ex-offender(s) or people in recovery from addiction
- Provides services which support people to break the cycles of crime and addiction
This could be the sole purpose of your organisation or an existing or start-up subsidiary of your organisation. In the case of a new project or subsidiary, we would only fund costs related to the area of the organisation that meets the mission of the Fund. The organisation could be public facing (e.g. retail) or providie support services to relevant beneficiary groups. Our purpose is the support of organisations that directly provide employment opportunities to these groups.
The Government offer similar unsecured loans for start-ups at 6% but only up to £25,000.
For a company that has been trading for less than three years, it can be difficult to get a loan over this level.
For example, if a start-up needs money for working capital to stock up inventory traditional bank loans needs to be backed by a personal asset (such as a home). If the company buys an asset, such as machinery or vehicles then these assets can be used as security.
Another hurdle may be that a person with a bad credit history is not eligible for formal loans or leasing options.
The loans from the Forward Enterprise Fund are unsecured. This means that there is nothing that the investor can have ‘security’ over – such as building or asset – that should you be unable to keep up with repayments they would have a claim over. Plus, remember that the loans offer a 15% grant contribution that is not repayable and a 1 year capital and interest repayment holiday.
What is important is paid, regular and contracted work. We are flexible with the form; Full-time or part-time employments, as well as engagement of more freelancers or hourly workers in the business can qualify an applicant.
Ex-offenders and people in recovery from addiction are the two groups mainstream employers are least likely to recruit. Yet having a job can bring independence and self-respect, and is the single most effective factor in reducing the risk of re-offending.
(Dame Carol Black, An Independent Review into the impact on employment outcomes of drug or alcohol addiction, and obesity) can be found here (External link)
Re-offending costs the public purse over £15 billion every year. Investing in charities and enterprises who share our mission means we can help create more employment opportunities, and demonstrate to the public and employers the untapped potential of people who have broken the cycle of re-offending and addiction.
We encourage you to apply as soon as possible, as we review applications on a continuous basis. We will provide feedback on your Expression of Interest to the Fund within 12 working days. (Please see the steps to Apply). The fund is planning to be open for new applications until 2020, provided that is has not been committed its capital before then. All updates will be posted on this website.
By this we mean an organisation that is capable of receiving and paying back (with interest) repayable finance. In summary we would expect an eligible organisation that is investment-ready to have the following:
- Clear and tested growth forecasts and cash flow projections
- Financial projections which stand up to robust testing and demonstrate how finance and interest can be repaid
- A business plan that demonstrates the resources required for growth, understand of the risks and mitigations
- Senior leadership team with the skills and experience to execute the business plan
- A Board and senior leadership team sighted on the risks and responsibilities of taking on unsecured lending and appropriate oversight to ensure systems in place to ensure loan repayments can be met
- A clear plan of how social impact will be achieved and risks mitigated
Grant funding will be available for eligible organisations to access business support to get investment ready.
Unsecured means the loan is not secured against any asset (e.g. a mortgage would be secured against a property and if payments were not made, the property would be repossessed). We are providing this type and size of fund because of the demand we see from charities and social enterprises. The interest rate is competitive for unsecured lending and we would work with applicants to understand their financing needs and what their business model could bear. The fund will not put organisations at risk. To understand whether social investment is right for your organisation, you can read more on the Good Finance Website. www.goodfinance.org.uk/
The Forward Enterprise Fund has an Investment Committee that will meet quarterly (or as demand requires) to make decisions about investment applications and review the performance of the investment portfolio.
Decisions on Business Support grants and Crowdfunder match-funding will be made by a Grants Committee comprised of members representing Social Investment Business and The Forward Trust.
There is also a Strategic Committee involving members representing the Social Investment Business and The Forward Trust that reviews the mission and impact of the Fund.
The mission of the fund is to invest in organisations that can create and demonstrate employment opportunities for ex-offenders and people in recovery. We expect applicants to understand their social impact, if they don’t already have a Theory of Change and reporting. We will require organisations to report about the employment outcomes for relevant beneficiaries. If successful we will work with an organisation to identify the best social outcomes it should be reporting (if it isn't already doing so). Reporting requirements will be proportionate and reasonable for an organisations’ scale and operations. To understand more about social impact visit the Good Finance at www.goodfinance.org.uk/measuring-social-impact
Organisations not registered or operating in England will not be eligible for the Fund. To understand what types of legal structures we can support, please see ‘How we think about Social Purpose’. Organisations seeking funding for religious or campaigning purposes are not eligible. For individuals applying to the Fund, we may also ask further questions about people’s histories (convictions and recovery). To understand more about how we think about Disclosure, visit our ‘Disclosure page’. Other considerations, like industries aligned with the Fund’s mission, financial performance, leadership, risk and reputation and governance will be reviewed together.