Community Share Loan - Social Investment Scotland

Community Share Loan
A collaboration between
Social Investment Scotland and Community Shares Scotland
Social Investment Scotland (SIS), in collaboration with Community Shares Scotland, now provides
loans to organisations raising funds through a community share offer. This will enable organisations
to progress their projects in the event that the share offer does not raise sufficient funds.
Key details of the Community Share Loan include:
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A loan to support you achieve your share offer target. Subject to credit approval, the
commitment level will be agreed on a case by case basis up to a maximum of £1m to a single
project.
Fixed annual interest of between 7% and 9%.
A maximum term of 10 years.
The loan can be interest only for up to 18 months. This interest can either be paid or deferred,
followed by equal payments of capital and interest over the remaining loan term.
The loan can be repaid from income generation or through subsequent share issues. There
are no fees or penalties for early repayment.
SIS loan can be involved alongside commercial loans.
There must be a minimum value of shares committed before SIS loan can be drawn and this
will be agreed on a case by case basis depending on the target. This is not a bridging facility.
How much will it cost?
There will be two charges for this:
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Initially, 0.5% of the loan amount offered in order to underwrite the share offer, subject to a
minimum of £1k, followed by
0.5% of the amount of SIS loan drawdown (a successful share offer may result in zero
drawdown).
The organisation will also need to pay all costs incurred in respect of any due diligence and security
required. SIS can however provide the organisation with an indication of costs, which may vary
depending on the project.
There are no fees or penalties for early repayment of the loan.
What are the benefits to the community?
The community share loan will allow projects to be started even if not all of the money needed has
been raised through the issue of shares, based on the knowledge that investment funding has been
raised to make up the difference. During this process, the share offer can remain open.
A SIS funding commitment will provide confidence to potential investors in the share offer that the
project will go ahead. Given SIS’ excellent funding track record, investors will also take comfort in the
due diligence undertaken which will provide increased investor confidence.
Further to this, SIS will provide ongoing business support and advice to the organisation through a
dedicated named Investment Manager for the duration of the loan.
Community Share Loan
A collaboration between
Social Investment Scotland and Community Shares Scotland
Next Steps?
If you have a project you would like to discuss, or if you have any questions about the community
share loan, please get in touch with Kayla on 0131 558 7706.
If you wish to proceed with a loan application, SIS will undertake an assessment to ascertain the
project is financially viable and aligned to SIS social and / or environmental impact requirements. The
project will then be presented to the SIS Investment Committee for approval.
SIS – who are we?
SIS, established in 2001, is a registered Charity and Social Enterprise which makes investment in third
sector organisations. SIS aims to support the creation and growth of charities, community
organisations and social enterprises that have the capability to make sustainable social and
environmental impacts. Any surpluses generated by SIS are re-invested in the third sector to create
more social impact.
SIS has made over 300 investments of over £45m, helping hundreds of charities, community
organisations and social enterprises across Scotland to increase their impact. To access our latest
impact report visit our website www.socialinvestment Scotland.com or click here.