Today we launched the UnLtd Impact Fund, to address one the key challenges for early stage social ventures: getting to access to capital, specifically the “missing middle” of financial support for social ventures looking to grow.
The Impact Fund will deliver large-scale social impact, initially focused on creating jobs and employment opportunities.
We have long identified the missing middle as one of the biggest barriers facing social ventures, meaning too few early stage ventures can scale their impact. The research found social entrepreneurs urgently need intensive support and access to appropriate capital in order to thrive. Earlier this month, the State of Social Enterprise from SEUK echoed this challenge.
The UnLtd Impact Fund has been designed to address this challenge head on, with a specific initial focus on helping social ventures whose primary purpose is increasing access to employment. The Impact Fund will invest in around 35 social ventures over the next three-years, working with Access – The Foundation for Social Investment, which exists to help charities and social enterprises access capital. The work is supported by funding partners the Big Lottery Fund and Big Society Capital.
For the first call-out, the UnLtd Impact Fund is looking to support social ventures tackling challenges related to training and employment – including school leavers and apprenticeships, further and higher education, unemployment and underemployment, and supporting those distant from the labour market. Expert partners for the fund will include City & Guilds, a leader in global skills development.
Offering specialist support will be at the heart of the UnLtd Impact Fund. Alongside finance, the fund will aim to develop a pipeline of successful scaling ventures tackling the challenges of training and employment.
Each package of support will be tailored to the requirement of the social venture. Among the help on offer is one-to-one support with a dedicated Venture Manager (one of our experts in supporting social ventures to scale their impact) , peer-to-peer learning through sector events, and pro bono support from legal firms.
Social ventures will be offered access to between £50,000 and £150,000 of debt investment, which will include an element of grant funding. The level of grant funding is decided on a case-by-case basis, but it is expected to be an additional 15% of the loan amount. The UnLtd Impact Fund offers unsecured business loans at an interest rate of 9.5% repayable over a maximum of five-years, with all Fund profits reinvested to support more social ventures.
Mark Norbury, UnLtd CEO, said: “Social entrepreneurs are pioneering new ways to help people distant from the labour market to address skills gaps and find meaningful jobs. But, it’s not easy. Access to affordable finance comes up time and again as one of the biggest barriers for social ventures looking to grow, especially where there is a lack of meaningful advice for the social entrepreneur. The UnLtd Impact Fund addresses this funding and support challenge head-on.”
Mark added: “We’re delighted to be working with Access and City & Guilds on the UnLtd Impact Fund. These organisations both share our determination to unlock people’s potential and support social entrepreneurs to build their growth and impact.”
UnLtd’s previous accelerator programme, Big Venture Challenge, ran between 2013 and 2017 and supported 120 ventures to raise more than £13million of social investment. The scheme saw social entrepreneurs being supported to raise capital, which UnLtd then matched. It saw the average number of beneficiaries for each social venture increase seven-fold from 114 to 798.
Seb Elsworth, Chief Executive of Access, said: “UnLtd are very well placed to help better connect the sector to the capital it needs. They understand as well as anyone the growth challenges which social enterprises experience and have developed a fund in partnership with City and Guilds which will provide much needed finance and support to organisations seeking to tackle employment issues. We are excited to see the impact which this fund will help social enterprises to achieve.”
More information on the UnLtd Impact Fund is available here: unltd.org.uk/unltd-impact-fund