A £4m flexible social finance offer has launched today, to support socially trading organisations in Newcastle, North of Tyne and Northumberland to grow.
Created in collaboration with community business champions Big Issue Invest and Power to Change, the ‘finance for good’ fund aims to support the growth of the social economy in the North of Tyne, by providing access to flexible and tailored finance and support.
Socially trading organisations are businesses which set out to deliver social benefits and trade commercially. They include community businesses, community interest companies, social enterprises and cooperatives, who demonstrate their social purpose through tackling social and environmental issues.
In the North of Tyne there are approximately 3,500 socially trading organisations employing almost 30,000 people. Power to Change research has shown for every £1 spent by a community-owned spaces, 56p stays in the local economy, compared to 40p for large, private sector firms.
Designed using feedback from local socially trading organisations, the fund offers patient, flexible payment terms and can be used for a wide range of projects to help organisations to grow their trading activity, create new jobs and increase their social impact. This might be through carrying out building works or refurbishments, purchasing new equipment, or improving or adding new services.
Repayable and tailored finance options of between £50k-£400k will be available and wrap-around support, specialist advice and mentoring will also be provided.
The fund is part of the Mayor’s commitment to helping local businesses create more jobs and build community wealth.
North of Tyne Mayor, Jamie Driscoll said:
“We need more socially trading organisations with good business plans that serve their communities. This is a practical support offer, which has been designed by and for, the people who will use it.
“It’s flexible- hence the name – and it can be used for just about anything. It’s there to help socially trading organisations in the North of Tyne reach more people and do more good.
“In the past small businesses, social enterprises, and co-operatives have struggled to find the money they need to grow and thrive. Financial support has often been provided by commercial banks or hedge funds meaning the repayment leaves our region.
“The money in our fund will be recycled, supporting more local businesses and creating more jobs in the North East.”
Danyal Sattar, Chief Executive of Big Issue Invest said:
“Access to finance is a fundamental building block of an effective social economy. By launching the flexible social finance facility in the Northeast this coalition will boost the ecosystem that supports socially trading businesses. These organisations exist to address local demand for services that improve the lives of people in the Northeast in the ways that matter to them. Through this programme we also aim to attract more funds and services to the region to build a more resilient local economy, that will support people well beyond the life of this programme.”
Tim Davies-Pugh, Chief Executive of Power to Change said:
“Community business and other socially trading organisations play a vital role in creating resilient and prosperous local economies. Run by local people and trading for the benefit of their community, community business combines the social productivity of charities with the economic productivity of other forms of business, operating in even the most disadvantaged communities.
“However, getting the right funding at the right time is a constant challenge for community business, which is why Power to Change are pleased to partner with North of Tyne Combined Authority to shape a new fund for the sector in Newcastle, North of Tyne and Northumberland. We welcome the £4 million being made available to community business and other socially trading organisations across the region to support their growth and vital contribution to a more inclusive regional economy.”
Charlotte Windebank, Managing Director at FIRST, helped design the fund and said:
“Tailored support for ambitious social entrepreneurs is exactly what the region needs. With a combined effort from all stakeholders, we can continue to grow services that provide much needed resources and empowerment for under represented and under resourced communities from across the North East. At FIRST we are delighted to support and welcome the opportunities and ideas the fund will present.”
Registration for the fund is now open to socially trading organisations based in Newcastle, North Tyneside and Northumberland.
North of Tyne Combined Authority is particularly interested in hearing from organisations who are looking to grow and expand, and those serving disadvantage communities, organisations led by women or by people from diverse backgrounds and those which are tackling environmental issues.
To register an interest and find out more, please email: Socialeconomy@northoftyne-ca.gov.uk