Financial aid is available for the support of the development of cooperatives or employee-owned businesses and social enterprises in the UK for general business needs, including loans on property, business purchase, capital equipment and working capital.
ICOF manages a number of loan funds throughout the UK. Many are specific to cities, eg London, Manchester, Cardiff, Swansea and Wakefield, and others covering larger areas, eg East and West Midlands or parts of South Wales. For those areas not covered by specific funds, the following are available:
- ICOF plc - a national fund for worker cooperatives.
- Community Capital and Co-operative Loans - a UK-wide fund available for community businesses and any other trading organisation within the social economy.
Advice is offered to borrowers throughout the term of the loan, as part of the funding package.
Loans from £10,000 to £75,000 are normally available, however, from other funds under the sponsor's management they are able to lend up to £150,000. Loans to new businesses are usually part of a larger financial package and not normally more than 50% of that package.
There is no set lending term; as far as is possible, loans will be tailored to the needs of the business and the capacity to make repayments. The maximum term is usually ten years.
Loans are available to co-operatives, community businesses, voluntary sector businesses and social or green businesses who wish to own and democratically control the business in which they work, or which operate in their local community.
This is achieved by the provision of finance and financial services, throughout the UK, to those enterprises which practice or support the principles of co-operation, common ownership, employee, community or social ownership, equal opportunity and sustainable development.
Co-operative and Community Finance offers:
- Business loans with terms of up to ten years.
- Bridging loans against delayed grants.
- Loans on property or business purchase.
- Loans for capital equipment or working capital.
- Loans to replace inappropriate existing finance.
The ethical policy seeks to ensure that Co-operative and Community Finance avoids practice which it considers unethical. In particular, it will not lend to, and will avoid general business dealings with, any organisations:
- involved with the production or sale of weapons;
- which fail to uphold basic human rights within their sphere of influence;
- with connections to oppressive regimes;
- involved in the production of tobacco and tobacco products;
- which have been convicted of serious environmental pollution;
- which produce or distribute pornographic materials;
- which use timber from unsustainable sources;
- which manufacturer and/or distribute pesticide products which are harmful to the environment.
Co-operative and Community Finance will only invest in the social enterprises, co-operative and employee-owned businesses which are economically viable. Each enterprise must be able to demonstrate the ability to pay interest and repay the capital on any agreed loan finance.
Applications are welcome from:
- those starting a social enterprise, co-operative or employee-owned business;
- those who are seeking to expand a social enterprise, co-operative or employee-owned business;
- those wishing to take over an existing business and convert it to a co-operative or social enterprise. This may be where a business would otherwise close, be sold to a third party, or become a privatised public utility.
All types of social enterprise are able to apply, including cooperatives, social enterprises, community businesses, development trusts and businesses developed from the charitable and voluntary sector.
Loans may be used for match funding public or private grants.
Loans may be used for a wide range of purposes, eg start-up costs, recovery costs and expansion costs.
This is a rolling programme.
Applications can be made at any time.
The application procedure requires an application form to be sent with two copies of a business plan that includes:
- a full description of proposed activities together with details of membership, constitution and management structure;
- information about finance that includes two years' projections of profit and loss accounts, balance sheets and cash flows, overall finance requirements and any other proposed sources of finance. Audited accounts should be provided for up to three years for established businesses.
Usually a visit is required to the business and a detailed discussion of plans before a recommendation is made to a small panel of Trustees, who will make the final decision.