The Resilience & Recovery Loan Fund (RRLF) is a new fund for social enterprises and charities that are improving people’s lives across the UK who are experiencing disruption to their normal business model as a result of COVID-19. It has been established to make an existing government scheme (the Coronavirus Business Interruption Loan Scheme (CBILS – see below) more easily accessible to charities and social enterprises.
To date, RRLF has approved funding to 40 charities and social enterprises, with a total value of c.£15m.
The RRLF is being run by Social Investment Business (SIB) with an initial £25m investment and support from Big Society Capital. SIB is the lender and will work with experienced social investor partners on the delivery of the fund: Big Issue Invest, CAF Venturesome, Charity Bank, Resonance, Social Investment Scotland, Social and Sustainable Capital, and Wales Council for Voluntary Action. Other delivery partners may be added in the future. See below for where to apply.
The £25m is part of a wider package of support announced by Big Society Capital.
£4m worth of grant funding has also been made available to be used alongside the Resilience and Recovery Loan Fund to support charities and social enterprises based in and delivering the majority of their impact in England. Those applying for loans under the RRLF might be eligible for part of the total amount approved to be provided as a grant, reducing the amount repayable. Please see section 6 below for further information.
Who is it for?
Many charities and social enterprises have been affected by the current crisis and lockdown, and have lost income. In many cases, grants will be the most appropriate answer (for a full range of grant sources, see SIB and Good Finance pages); other organisations will be making use of other government schemes, such as furloughing staff (see NCVO’s pages for more information); others will not want to add more debt or additional loans to what they already have.
In short, we want to be clear that this fund will not work for everyone, and we only have a limited amount of money which cannot come close to meeting the scale of current needs in the sector. We hope it is a part of the answer for some.
RRLF is intended for those organisations who face a problem because expected income and activity has been delayed or disrupted. A loan may help with this, providing working capital until the normal business can commence again
Purposes that are excluded:
Organisations that apply for a loan to provide additional financial cushion.
Loans that refinance an organisation’s existing borrowing, except where part of the loan is being used to refinance an existing Bounce Back Loan.
The RRLF can make loans alongside other lenders or grant providers. However, consideration will be given on how the overall investment will affect an organisations financial position and its ability to repay.
Applicants cannot have both a loan supported by the Government-backed Bounce Back Loan Scheme (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS) at any one time. If you take out a loan supported by the BBLS and subsequently wish to take a loan supported by the CBILS scheme (as the RRLF is), you would need to refinance the BBLS loan in full with the CBILS/ RRLF loan.
If you would like to apply for more than one loan supported by the CBILS scheme e.g. with your bank and the RRLF, you can as long as the total of all CBILS supported loans does not exceed £5m.
This fund is only for social sector organisations: charities and social enterprises that are improving people’s lives across the UK. Our initial investor is Big Society Capital – their remit (under Dormant Accounts Act) is to invest money in organisations that ‘exist wholly or mainly to provide benefit for society or the environment’; so any organisations need to be able to meet what is set out in Big Society Capital’s (BSC) governance principles. This includes charities, community interest companies, and community benefit societies – organisations that are not one of these legal forms (ie just a company limited by guarantee or company limited by shares) will need to demonstrate that they meet the BSC governance principles e.g. social objects in their Articles, a policy on profit distribution and an asset lock.
Eligible applicants will:
- be included on the list of qualifying entities (see Appendix 1 in the Fund Guidelines).
- if a Company Limited by Guarantee or a Company Limited by Shares be able to demonstrate the meet the BSC governance principles.
- have been operating for a minimum of two years.
- have a minimum turnover of £400k.
- have a turnover of less than £45m (whole group – if applicable).
- have more than 50% of income from trading activity (whole group – if applicable). This eligibility criteria does not apply to registered charities
- and further education colleges.
- trade in the UK and the loan will be used to support trading in the UK.
- be able to confirm that the organisation has been adversely impacted by COVID-19.
- be able to demonstrate that the organisation has a “viable” business proposition.
- be able to demonstrate that the organisation is not an “undertaking in difficulty”.
- be able to confirm that the loan will not be used in an “excluded sector”.
- be able to demonstrate that outcomes of the product or services provided are specifically relevant to improving people’s lives, even if improving
- people’s lives is a secondary outcome area of your organisation.
Further detail on eligibility criteria can be found in the Application Guidance (available to download at the bottom of this page). We recommend you read this document, particularly the eligibility section, prior to completing the application form.
RRLF closes to new applications at 11.59pm on Sunday 31 January 2021. Applicants will be considered on a first come first served basis and the closing date of the fund is subject to constant review.
For more information and for further funding guidance, please visit the Social Investment Business website.