The first loans from Social Investment Scotland Community Capital fund have been awarded
Seven social enterprises based in Scotland have each won investment loans of between £25,000 and £100,000 from a group of private investors.
The enterprises which range from a traditional boat festival in Aberdeenshire to a new Edinburgh café will share a pot of £400,000 contributed to by 27 individuals making use of a new tax relief fund.
Social Investment Scotland (SIS) Community Capital was the UK’s first social investment tax relief fund, allowing individuals to invest in a fund which provides both tax relief and also a social return on investment, by supporting the development of social enterprises. Tax relief for investors is provided in the form of a 30% relief on their investment from their income tax liability.
Loans from the new fund are structured to allow social entrepreneurs to generate income and use cash flow to build revenues paying interest only in the first three years at an affordable rate of just 6% per annum.
The largest beneficiaries are Street League and Just Trading Scotland, which were both awarded £100,000.
These seven social enterprises will now have the time to develop their businesses and focus on increasing their social impacts
Street League tackles youth unemployment through a structured football and education programme and Just Trading Scotland aims to help smallholder farmers and craft workers reach a wider retail market to sell their goods.
Other awards include £50,000 for Broxburn United Sports Club to improve its facilities, £50,000 for the Scottish Traditional Boat Festival to take on a 25 bed bunkhouse and £25,000 for the Edinburgh Sculpture Workshop to fit out a new café space.
MacDougall of Dunollie Preservation Trust in Argyll and Bute was awarded £30,000 to develop its heritage experience and Dundee Gymnastics Club 2K was given £44,000 to finance a new lease, redecoration and gymnastics equipment.
Alastair Davis, chief executive of Social Investment Scotland, said: “SIS Community Capital is a great example of how we can use social investment tax relief to open up a new source of capital for social enterprises.
“We’ve seen a huge amount of interest from investors, who have been keen to become part of a new and innovative way of helping to support and grow Scotland’s thriving social enterprise sector.
“Using the funding from SIS Community Capital, these seven social enterprises will now have the time to develop their businesses and focus on increasing their social impacts, before loan repayments begin.”