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Access to Finance

Many businesses require finance to start up or at later stages to grow. Mainstream banks have traditionally been reluctant to loan to cooperatives while the minimum level of business loans from most banks is also now around £100,000. Similarly, because cooperatives are unable to offer equity stakes in the manner of standard companies which can later be sold to extract profit, they are not of interest to venture capital.

One form of finance only available to Community Benefit Societies is community shares. You may wish to promote this within wider awareness raising work as well as within any municipal crowdfunding programmes.

To address the barriers to finance described, as well as ensuring that any wider business grant or loan fund is accessible to cooperatives, you may wish to consider creation of a grant programme or rolling investment fund specifically for cooperatives. Some councils have also been known to commit to match fund eligible community share offers.

Useful resources:

Possible sources of funding include:

  • Power to Change: signposting to funding opportunities here as well as some funding of their own.
  • Cooperatives UK: operate the Community Share Booster Programme.
  • Reach Fund: helps charities and social enterprises (including community benefit societies and, in some cases, co-operative societies) raise investment, the programme offers grants on average between £5000 and £15000. The grant is aimed at helping these organisations provide the final information that investors need before they can invest. Co-operatives UK is an Access Point for the Reach Fund.
  • The Architectural Heritage Fund: provides advice, information, and financial assistance to charities and not-for-profit organisations working to save historic sites in the UK.
  • Community Ownership Fund: a government initiative designed to help communities take ownership of local assets and amenities at risk of being lost. At the time of writing it is unclear whether this will continue. You can read more on the website.
  • Loans for Enlightenment Agriculture Programme: offers financial support to projects that seek to create sustainable and enlightened agricultural practices.

Other relevant resources include: