Charities should get extra time to apply for emergency coronavirus loans because many in the sector lack the capacity to submit applications to different bodies at the same time, according to social investment organisations.
A coalition of social investors, including Big Society Capital, Social Investment Business and Access, have asked the government to give charities another six weeks to apply to the Treasury-backed Resilience and Recovery Loan Fund (RRLF).
RRLF is funded with £25m from Big Society Capital and has access to the Treasury's Coronavirus Business Interruption Loan Scheme. It is due to close to applications in nine days, but the proposal from social investors would move the deadline to 4 November.
£10m of loans made so far
So far 28 charities and social enterprises have received a total of around £10m in funding from the RRLF, according to a statement.
The social investment coalition said that it believes many charities currently lack the resources to apply to the RRLF, but may do so with more time.
BSC said in a statement that it “understands from conversations between social lenders and borrowers in their pipeline that many charities and social enterprises have delayed their applications as they apply to grant programmes first, such as the National Lottery Community Fund.
“Given their size, most have no capacity to undertake more than one application at a time and many charities will only find out the outcome of their grant application – and therefore will not know their funding status – until September, by which time it will be too late to apply for CBILS.”
BSC boss: Extension an opportunity for millions more in funding
The statement added that funding so far included money for a charity which provides foodbanks and mental health support to NHS workers, and a social enterprise helping those at risk of homelessness to find jobs.
Stephen Muers, the interim chief executive of Big Society Capital, told Civil Society News that around £1.5m in loan finance was agreed each month, so he hoped the RRLF could make “several million” more available to charities and social enterprises if the deadline was extended.
He said that applications worth “about £6.5m” had been made but not yet approved.
Muers added that prioritising grants was “the right thing for charities to do” at a time when they were “juggling so many things”.
He said: “Understandably, organisations are under a lot of pressure, and they will do things in sequence. You potentially go for the grant funding option first. And then, in addition to that or instead of it, if you need to look at the programme we have put out with our partners, that comes a little later.”
Other government support
The social investment coalition said that, according its own analysis, half of applicants to the RRLF have applied for emergency support from non-government sources, and more than a third have applied for some of the money promised to the charity sector as part of the government’s coronavirus bailout fund.
The organisations joining BSC, Social Investment Business and Access in calling to extend the CBILS deadline are Big Issue Invest, Charity Bank, Resonance, Social Investment Scotland, Social and Sustainable Capital, and Wales Council for Voluntary Action.