Start & Grow offers investment packages of between £10,000 and £60,000 to social enterprises, community organisations and charities to start-up, develop and expand their enterprising activities. Start & Grow investments are always made up of one third grant and two thirds loan, and are unsecured. Loans are repayable over up to five years (flexible terms can be agreed) and are charged at a fixed interest rate of base rate (currently 0.25%) plus 6%.
Investments can be used for both revenue and capital costs (including set-up costs). Your application must demonstrate that, as a result of our investment, your business will make a difference in the community in which you work.
Why should I choose Start & Grow?
- Provides flexible, unsecured investment that allows your business to grow
- One third grant makes the whole investment more affordable
- Simple application process
- No security required
- No arrangement fee
How do I apply?
Frequently Asked Questions
Start & Grow is a rolling programme; there are decision-making panels every two months. Your application will be fully assessed and, if it is recommended for investment, it will be considered at the next available decision making panel.
The decision-making panel meets every two months. We ask that your completed application, along with all the supporting documentation, is with us at least two months before the panel date to allow sufficient time for assessment.
The Resilient Scotland team try to process all applications as quickly as possible. However, the time taken does depend on the quality of information received from applicants and the level of applications received for each round.
Applicants to Start & Grow cannot receive a grant without also taking out a loan. Investments are always one third grant, two thirds loan.
The interest rate will be set at the current base rate + 6% (fixed for the term of the loan). This is a competitive rate when considered alongside other social finance available in the current market.
A social enterprise can be a Company Limited by Guarantee with an appropriate “asset lock” and social purpose; it could also be a registered charity. Common types of social enterprises are Co-operatives, Community Interest Companies (CICs), Development Trusts, Credit Unions and Housing Associations.
We define social enterprises as businesses with social and/or environmental objectives whose surpluses are reinvested in the business or to improve their community, instead of maximising profit for shareholders and owners.
Your constitution (more commonly known as the governing document or Memorandum and articles of association) must include a clause (dissolution clause) that sets out what you need to do in the event of a decision to wind up or dissolve the organisation. The dissolution clause makes it clear that assets will not be kept or sold for any profit, but passed instead to another charity with the same or similar charitable objects. Your dissolution clause will need to be worded so that it demonstrates your compliance with charity legislation and/or Company Law, depending on how your organisation is incorporated.
Having an asset lock also means that upon winding up, an organisation can only pass what is left in the business to another company (social enterprise, community enterprise or charity) with similar charitable aims. It also prevents assets being disposed of while the organisation is still running for less than their value (e.g. you can’t sell off a £300 laptop to a staff member for 1p).
The primary aim of all social enterprises must be a social or environmental one.
We cannot recommend what constitutes a social or environmental mission, these are different for each organisation, but an organisation’s social or environmental mission must be explicit in the governing documents and you should explain and justify the value of these when applying for investment.
This is possible in certain circumstances. For example, if you are proposing to start up a new enterprise or extend an existing activity which will create or sustain employment in one of the 13 areas you may be able to apply even if your main operational base is elsewhere. If you have answered “yes” to all the eligibility checklist questions but still have doubts about whether you can apply you should contact us to discuss these in more detail.
There are no arrangement fees or legal fees in the normal course of making the loan and grant. In some cases, where particular conditions are imposed, the applicant may have to seek legal or other advice and this may incur a cost.
You may repay the loan early and there are no penalties or fees for doing so. You may make larger payments than the agreed monthly payments, but these must be of £250 or multiples thereof.
Should you anticipate any problems with meeting your loan repayments, you should contact the Resilient team as soon as possible.
We will always discuss your particular situation and be flexible in our approach to helping you overcome any financial or cash flow problems if possible.
All Start & Grow loans are unsecured.
In the event that there is other unsecured borrowing (for example, Directors loans), we may ask for a Letter of Postponement to give us comfort that the repayment of the Start & Grow loan will be given priority.
If the loan is for purchase or refurbishment of a property, we may ask to see the relevant planning permissions, building warrants, licenses etc.
This is no longer a requirement for Start & Grow investment, but if we think that a proposal could be ‘bankable’, then we reserve the right to request evidence that commercial lending has been refused.
You will be required to submit up-to-date information about your finances and your performance on an ongoing basis as part of our monitoring process. This will be different for each applicant, but for Start & Grow will be ‘light touch’, unless the investment is considered to be very high risk. For example, we may ask for submission of quarterly management accounts and/or short impact reports to tell us how you are meeting your stated outcomes.
You are required to inform us of any changes in governance during the repayment term.
Yes, but we would look at any restrictions or conditions that other existing lenders may have imposed in case they affect the terms of our investment. We also ask that you inform us if you intend to take on any new debt funding during the term of the Start & Grow loan.
If there are unsecured loans in the company from Directors or other individuals, we may ask for a Letter of Postponement to give us comfort that the repayment of the Start & Grow loan will be given priority. This prevents organisations from using the Start & Grow investment to repay other existing debts.
Some investees have taken Start & Grow investment and have successfully returned to us for further investment. All applications are considered on the same basis, so if the debt can be serviced and the outcomes are sufficient, it is possible.
- Businesses that are insolvent or at the immediate risk of insolvency
- Proposals that are merely to replace existing debt finance
- Subsidiaries of public bodies
- Proposals capable of being fully funded on a commercial basis
- Organisations whose beneficiaries are outwith the 13 eligible local authority areas.
- Proposals that promote religious practices or beliefs.