Scottish government opens up ‘repayable grants’ to environment-focused social enterprises
Social enterprises based in Scotland and working on environmental issues can now access dedicated funding to help them grow their business – but with some strings attached.
The £500,000 Boost It fund, for social enterprises based in Scotland and working on environmental issues, was first announced in October by Cabinet Secretary for Communities and Local Government Aileen Campbell. It opened for applications last week.
Part of the Social Entrepreneurs Fund – funded by the Scottish government and delivered by social enterprise agency Firstport – Boost It will provide what it calls ‘repayable grants’ of between £30,000 and £50,000 to young social enterprises responding to the climate emergency and other environmental issues.
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Firstport has been delivering the Social Entrepreneurs Fund (SEF) for the past ten years. Its ‘Start It’ and ‘Build It’ programmes offer grants of up to £25,000; the higher budget range of this new fund factors in the needs of environmental enterprises, which typically have higher startup costs than social ones, according to Firstport.
Those behind the SEF decided to start offering repayable finance because demand for funding was regularly surpassing supply: recycling repayments back into the programme will allow them to support more investees. As a pilot fund, Boost It is also seen as an opportunity to test new models of financing that may offer lessons for the wider sector.
Social enterprises will be asked to repay a percentage of their profits after year one, with the goal of repaying in full within three years
Selected social enterprises will be asked to repay a percentage of their profits after year one and only once making a surplus, with the goal of repaying in full within three years. A Firstport spokesperson said that this percentage was “not set in stone” and that decisions would be made “on a case by case basis to agree a percentage that is realistic and achievable”. No interest will be applied to the repayments.
Josiah Lockhart, Firstport CEO, said the fund would support those entrepreneurs who are already working full-time on their venture but “still far from achieving sustained trading” and most likely not ready, or not confident enough, to access social investment. The latest Social Enterprise in Scotland Census found that 10% of organisations had applied for a loan in the last 12 months, compared to 72% who had applied for a grant.
Boost It is one of the UK’s few funding pots to focus specifically on helping to grow social enterprises that prioritise environmental impact. It was developed partly because the SEF’s other programmes had been prioritising social rather than environmental impact, meaning social enterprises whose primary impact was environmental were less likely to get early-stage support.
Only organisations classed as social enterprises are eligible, though a number of legal forms will be considered such as community interest companies, Scottish charitable incorporated organisations (SCIOs) and limited companies with an asset lock.
- Read: The great climate confusion: Why social enterprise is still figuring out its role in the crisis
Lockhart said the climate emergency was “one of the most pressing issues of our generation” and that the fund would “aim to unlock the potential of Scottish social enterprises to address this challenge.”
Campbell said Boost It would help social enterprises with a direct environmental impact to “achieve their full potential, stimulating further growth and support in this area and enabling organisations to expand and thrive… As a nation we are determined to lead the transition to a net-zero carbon economy, and will do everything we can to help all parts of the economy contribute to net-zero emissions by 2045.”
Boost It applications are open now; the next deadline is Monday 3 February 2020. Find out more from Firstport.
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Header photo: Glasgow Wood Recycling, a social enterprise and charity that finds meaningful ways to reuse and recycle waste wood – to date diverting over 4000 tonnes of wood from being wasted and providing 740 volunteering opportunities as well as quality training for nearly 200 people. (Credit: Seamus Lumsden, Glasgow Wood Recycling)