Responsible Finance

📣 Great news, the Growth Guarantee Scheme has been extended to 2030. The Government has made access to finance central to its new plan for small and medium-sized businesses, which includes a five year extension to the British Business Bank's Growth Guarantee Scheme. This is fantastic news for accredited CDFIs which use the scheme, it’s something we and members have called for. Earlier this year we responded to the Department for Business and Trade’s call for evidence on access to finance for small businesses. Thanks again to our members who contributed to this. 🙏 The new plan also includes recognition that entrepreneurs "from under-represented backgrounds face distinct challenges in raising finance to start and grow their business" and that SMEs outside of London "experience a lack of readily available finance.” Enterprise lending and micro-lending CDFIs – whether or not they are accredited under GGS – play a unique and crucial role in addressing these gaps in access to finance, and we continue to press for appropriate policies and investment to support all our members. Thanks again to the Department for Business and Trade and the Government for working with us. Read the strategy here → https://lnkd.in/eumvqPaq

Today’s myth is that CDFI finance is slow to access. While every lender has their own process, many borrowers describe working with CDFIs as helpful, fair and fast. No matter whether the CDFI is lending to a small business, a social enterprise, or an individual, they check affordability and creditworthiness, are respectful, and build trust. Here’s what some customers had to say about their experience with CDFIs, as featured in our latest impact report 👇 John, who took out a personal loan, celebrated Fair Finance, highlighting how clear and accessible the process felt: “It seemed fair and fast to get approved. We all need to spread some costs out and if we can pay for things in chunks it makes life much easier.” A couple who needed home improvements turned to CDFI Lendology CIC | B Corp to take out a flexible home improvement loan. They described the process, saying: “The loan was fantastic, without the high-interest rates we saw elsewhere. The team was extremely helpful throughout the process. Everything was sorted in time for us to have our new windows fitted before winter.” Mahan, a refugee who needed finance to start his business, shared this about the support he received from Skylight Ventures: "Other organisations have much more complicated processes for refugees, but Skylight made It quick and easy for me to start my business, support my family, and open my eyes to future opportunities” Lyndsay Watterson, a small business owner selling handmade walking sticks, shared how support from the Business Enterprise Fund (BEF) | Loans & Finance for Small Businesses helped bring her vision to life: “We created the Hub where people can be measured and see all the options and what their future looks like with a mobility aid they love. BEF were amazing: very interested in what we do and who we help. The Hub is a magical place and BEF helped create it.” These stories reflect what sets CDFIs apart, they take the time to understand people’s needs, while still offering a lending process that’s fast, fair and supportive.

📢 The new impact report from NatWest Social & Community Capital reflects on their work with social enterprises to unlock potential in communities often overlooked. They’ve seen a huge surge in demand - read their full impact report to find out how they responded. Their investees' work created or maintained 590 jobs, directly impacting 62,183 people. NatWest Social & Community Capital prioritise three main areas of impact: ✅ Employment, education and training - helping with access to educational and vocational training to those furthest from the labour market. ✅ Support for disadvantaged communities - promoting social equity and inclusion of most under represented groups. ✅ Community regeneration - regenerating local economies and breathing new life into public spaces. NatWest Social & Community Capital provide a continuous quality of support with 96% of their investees being likely to recommend them. This figure speaks to the brilliant work they, like other CDFIs, do all year round. To read their full 2024 impact report click here → https://lnkd.in/ghJdTzHM

One myth about CDFIs is that they "only lend to small or start up businesses”. But CDFIs actually fund a wide range of organisations. Yes, many CDFIs provide start-up loans and other finance to new businesses – last year they made nearly 5,000 Start-Up loans at an average amount of £12,369 each but they also work with: 💼 Established firms needing to invest in growth CDFIs enable businesses to move forward with plans to create jobs, develop products, or invest in marketing and business development. CDFIs’ average small business loan was for £79,752 in 2024, with 94% of these businesses previously declined for external finance. 🔧 Sole traders & micro-businesses Many lenders can’t support people who have been unemployed, ill, are refugees with the right to work, or don’t have good credit scores. Specialised CDFIs provide mentoring, grants and loans to enable people to become self-employed, launch a business or return to work. In 2024 these CDFIs supported 187 entrepreneurs with an average loan of £2,876 to fuel their determination and potential. 🏢 Social enterprises & charities CDFIs are social enterprises and support other purpose-driven organisations to increase their impact, offering tailored and flexible finance options aligned with organisations' missions. In 2024, CDFIs made 364 loans to social enterprises with an average loan amount of £103,448 – helping to strengthen communities and create lasting change. 📍Businesses in underserved areas and led by underserved entrepreneurs CDFIs operate across the UK and work to ensure regions and communities with limited access to finance have the options they need. By investing in people who are often overlooked, CDFIs are driving entrepreneurship, strengthening communities, and helping more individuals build a better future. 🤝On top of this, personal-lending CDFIs help hundreds of thousands of people avoid higher-interest loans and illegal lenders.

📣 Encouraging to see continued government investment in programmes that aim to improve long-term outcomes for children and families. Targeted investment like this can help unlock innovation for communities that need it most. A really interesting read👇

📢 New impact report from GC Business Finance highlights the role and effect of CDFI and responsible lending in helping small businesses to thrive. Key headlines from their 2024–25 report include: → GC Business Finance supported 10,603 SMEs in 2024-25 → It deployed a total of £136.6m across its funding and finance programmes → 39% of businesses backed were female founded GC Business Finance delivers a range of finance options, including: Northern Powerhouse Investment Fund II (NPIF II) In partnership with River Capital, GC Business Finance manages the North West allocation of NPIF II. Backed by the British Business Bank, the fund offers loans to help businesses grow and create jobs across the North West. In their first financial year of the program, they delivered a total of 31 loans worth £1.74m in funding, helping to create and protect 248 jobs in the region. Start Up Loans As a national Business Support Partner for the British Business Bank’s Start Up Loans scheme, GC Business Finance has helped thousands of new businesses get off the ground. In the last financial year, their start up loans team delivered over 10,565 loans to entrepreneurs nationwide, an 8% increase from the previous year. Innovation Investment In FY2024–25, GC Angels continued to support early stage investment for ambitious founders across Greater Manchester, with a focus on improving access to funding for underrepresented groups. Over the past 12 months, their team has directly invested £605k into six businesses, more than doubling last years figure. Explore the full report for more on their brilliant work over the past https://lnkd.in/dbMeXGcR

We appreciated the opportunity to take part in a meaningful conversation with founders from the Foundervine network. Thank you for hosting a thoughtful discussion on the challenges some founders encounter and exploring the role alternative finance plays in expanding available options. As founders shared their experiences, we were proud to represent Responsible Finance CDFIs, who are working to meet these challenges. 🔁 Reposted from our Membership Director Matt Woodcock

Social enterprises provide services and support within communities across the UK, often in areas where access may be limited. 🟢 Some help people access work, new areas of education and can even help with training options. Aiming to support those who’ve faced barriers to employment or have lacked access to traditional pathways. 🌿 Some aim to reduce environmental harm and focus on boosting biodiversity. Whether this is through sustainable practices, ethical land management or low carbon innovations. 🤝 Some work in partnership with vulnerable people and communities with complex needs, helping to deliver support that has a long term goal. 🏘️ Some create assets that people actually need and want! Focusing on their communities demand to provide things like childcare services, enjoyable public spaces or local business hubs. 🏥 And some run flexible, preventative health and care services meaning they can reach people early, offer quicker support and provide better long term outcomes. Many social enterprises want to grow but face challenges accessing finance. Our members provide finance to organisations that can find it harder to access conventional funding, enabling them to grow and strengthen their impact. Explore the full carousel below👇

“It almost brings me to tears how important this is” says Peter Udale of the crucial role CDFIs play in addressing funding gaps for small businesses. "There are lots of small businesses out there that can be helped in areas of high deprivation. Businesses run by women or people from an ethnic minority background can really help reduce social inequalities and unlock entrepreneurial activity." Peter is quoted in a comprehensive feature in the new issue of ICAEW’s Corporate Financier magazine. Drawing on Responsible Finance impact data and interviews with Peter, Richard Bearman, Danyal Sattar OBE and others, the piece covers CDFIs’ history, powerful track record, and ambitions to scale support to small businesses. It highlights the British Business Bank’s Community ENABLE Funding initiative, which will support up to £150m of lending over the next two years; and how a £4m capacity-building initiative supported by JPMorganChase will strengthen CDFIs’ operations. And it flags up our work with Lloyds Bank to understand how to create a referral programme where more of the declines and the discouraged don’t fall out of the market. "I think CDFIs can do a really good job because they’re generally on the ground and local and have a better understanding of which businesses are likely to survive,” says Peter. "We’ve come a long way in making the sector more professional and more investable. And rather than seeing banks as the opposition, we very much see them as partners.” Read the article here: https://lnkd.in/gPt9Qmx3 Thanks Marc Mullen and ICAEW Corporate Finance Faculty for your interest in CDFIs.

👏 A big thank you to our member Let's Do Business Finance for hosting Wednesday's webinar on Unlocking Finance for Your Business. Our colleague Matt Woodcock joined the panel alongside Lisa Young, Susan Elliott to discuss the practical challenges that small businesses can encounter when seeking finance to grow. Matt shared some really interesting data from our impact report with attendees: “The CDFI sector is increasing lending year on year, and across our members in 2024 they lent 141 million to small businesses, which was a 39% increase on the previous year.“ ⏱️Head to the five min mark to hear all the stats about CDFIs lending to small businesses. Want to hear the full conversation? You can watch the session back anytime here → https://lnkd.in/dSE86C52