Social Finance secures £1.5m for Bright Futures using SITR
Ability Tec, based in Bolton will receive a loan of £260,000, repayable over five years. Ability Tec makes circuit boards to order and three quarters of its employees (pictured above) are disabled.
Ability Tec will use the money to double the size of its workforce, which numbers eight people at present. Oli Randell, Ability Tec’s founder and managing director, said: “With the cost savings and additional working capital from the Bright Futures Fund’s investment, Ability Tec will be able to hire an operations director and additional production staff."
When it was first launched, the Bright Futures Fund was the first to use the social investment tax relief (SITR) to attract investors. SITR allows investors to claim back 30% of their investment into a social venture against their tax bill.
The fund has so far raised £1.5m from 40 investors using social investment tax relief. The fund is managed by venture capital firm Kin Capital.
Kin Capital has relationships with wealth managers and independent financial advisers and its clients are investing in the fund.
Tom Hopkins, partner at Kin Capital said: “The main appeal of the fund has been the social return. Financial advisers are increasingly having clients that show an appetite for socially responsible investment, and it is these clients who were attracted to investing in the fund.”
Hopkins feels that investors are principally attracted because of the investment opportunity, rather than being able to save some money on tax: “Whilst the SITR tax break undoubtedly encouraged investors to look at the investment opportunity, and help bridge the potential return gap, the fund is a investment led proposition rather than tax-led.”
The role of Social Finance is to find investible propositions. It is doing this via its network including other social investment finance intermediaries and social enterprise incubators.
Social Finance is on the lookout for more investees. Director Annika Tverin said: “We will consider all sorts of enterprises from pretty much any field, manufacturing and business services enterprises as well as companies whose social impact agenda is more obvious.
Potential social enterprise investees need to be medium sized (no more than £15 million in gross assets and more than 250 employees). They also need to fall into the category of being either a community interest company, charity or community benefit society."