A £30 MILLION fund has been launched to support social enterprises in Scotland, the Scottish Government has announced.
The Scottish Investment Fund is an initiative to aid third-sector businesses that are unable to gain access to funds from banks and mainstream lenders.
Administered by Social Investment Scotland, the aim of the fund is to enable social enterpris
es to become more commercially viable businesses. It is being targeted at social enterprises to provide support during the current economic climate.
So-called social enterprises are organisations that are set up to tackle a social or environmental need – examples include the Big Issue magazine and Jamie Oliver's restaurant, Fifteen.
These types of organisations are distinctive because they reinvest their profits to further their aims for social or environmental progress.
Social Investment Scotland will grant investment packages ranging between £100,000 and £1 million. The funding will be comprised of a combination of loans at affordable fixed rates and non-repayable grants.
The £30 million investment will be made over a three-year period, with £4 million granted in the first year, £10 million in the second year and £16 million in the third.
The fund aims to make disbursements to about 60 to 80 organisations over the duration of its work.
Funding for the first year of the initiative will be granted in particular to social-care projects, environmental projects, employment training, disability services and health-equality initiatives.
To be eligible for funding, businesses must be based in Scotland and must be able to show they have been trading successfully for at least three years and generating income other than grants.
Decisions about investments will be made by a panel that will include representatives from the Scottish Government and a number of individuals with strong backgrounds in banking and financial services.
Scott Anderson, the chief executive of Social Investment Scotland, said: "The Scottish Investment Fund (SIF] marks a new way forward for social enterprises. It will give an added commercial focus to the sector and help organisations develop revenue generating initiatives.
"SIF offers an additional means of attracting funding for social enterprises with real growth potential. For those who qualify, the fund will give them the capital they need to help them succeed.''
Mr Anderson added that SIF was looking to receive more proposals from businesses.
He said: "I would encourage any individuals running social enterprises that have the scope for growth to consider the benefits of SIF and contact us to see if they are eligible."
The investment-fund initiative builds on the work of the Futurebuilders Scotland programme, a grant scheme for social enterprises that was launched in 2004.
Unlike Futurebuilders Scotland, however, businesses which gain funding from the SIF will have to repay some of their loans when they become commercially viable.
Social enterprises that benefited from the Futurebuilders Scotland programme include Cornerstone Community Care, a charity that provides services for adults and children with learning disabilities, and the Wise Group, which helps people to gain training and experience to get into employment.
For more information on the programme, visit
www.scottishinvestmentfund.co.uk.
