Lobbying government for improved access to financial support
In response to feedback on the difficulties experienced by many social enterprises in accessing Covid-19 financial support, we are working with our social economy partners to influence the government to ensure that these support packages are available to support social businesses through this crisis.
These businesses are playing a crucial role for our communities in this pandemic. They are easing the pressure on frontline health and care services by producing PPE, facilitating online education and training, providing mental health support, and much more. It is also clear that the pandemic will continue to affect us all for many more months and social entrepreneurs need to be equipped and supported to keep doing their important work for the long-term.
Last week, we sent a letter* to Minister John Glen (Economic Secretary to the Treasury), raising our concerns that many vital services are in danger of being lost unless access to emergency finance is improved.
Back in the autumn, we collected feedback from the social sector, which showed there were some fundamental gaps and challenges in accessing the vital financial support being offered by the government. In particular, we looked at how easy it was for social businesses to navigate the government emergency loan schemes – Bounce Back Loans (BBLs) and Coronavirus Business Interruption Loans (CBILs).
The results of our survey, and consistent anecdotal evidence from social enterprises, co-operatives and community businesses, showed us that there are two key obstacles blocking access to government-backed loans:
- Many ethical and social banks that social enterprises bank with do not provide Bounce Back Loans
- Social enterprises are not able to open new accounts with participating banks
The waiting times to open new accounts are being quoted as months rather than weeks, and some businesses are being turned away by the banks responsible for delivering these loans.
These delays are being further exacerbated by the lack of infrastructure for social enterprises, as many of these businesses have complex bank mandates and ‘out of the ordinary’ legal structures, which require special channels to process loans. A 12 week wait for a loan could be the difference between a business surviving or failing.
We have requested a meeting with John Glen and his team, to agree a way to remove these barriers to the much-needed government-backed loan schemes. We hope that by working together with the government, these two obstacles can be swiftly overcome.
Thank you to everyone who responded to the survey. Your time and answers have been very useful in helping us shape a supportive response, and we will continue to use them to advocate for a supportive political environment for social businesses.
*Letter signatories:
Tony Armstrong, Chief Executive, Locality
James Alcock, Chief Executive, Plunkett Foundation
Kirsty Cumming, Community Leisure UK
Lucy Findlay MBE, Managing Director, Social Enterprise Mark CIC
Colin Jess, Director, Social Enterprise Northern Ireland
Peter Holbrook CBE, Chief Executive, Social Enterprise UK
Catherine Manning, Interim Chief Executive, Social Value UK
Rose Marley, Chief Executive, Co-operatives UK
Chris Martin, Chief Executive, Social Enterprise Scotland
Mark Norbury, Chief Executive, UnLtd
Derek Walker, Chief Executive, Wales Co-operative Centre
