Big Society Capital asks Westminster for emergency cash injection
The UK’s social investors say they are unable to meet demand for finance due to the Covid19 crisis, and have asked the government to contribute to a multimillion pound liquidity fund.
Big Society Capital, The Social Investment Forum and a group of 20 leading social lenders made the appeal earlier this week, saying that many charities and social enterprises faced “a real risk” of closing, thus presenting “significant risks” to society.
They have asked for:
- Changes to ensure the Coronavirus Business Interruption Loan Scheme is available to all charities and social enterprises. Currently, many charities and social enterprises are likely to miss out – either because they get less than half of their income through trading and are therefore not eligible, or because only a few social lenders are accredited to distribute them.
- “Significant financial backing” for an Emergency Liquidity Facility, to be delivered through existing social investors. The estimated need is “many multiples” of their current lending capacity, according to the signatories. (Big Society Capital is able to lend around £50m in a normal year.)
Big Society Capital’s head of engagement James Westhead told Pioneers Post the team had been already working “very closely with officials and ministers” on the proposals and that he was “very positive about progress” so far.
The proposed Emergency Liquidity Facility would combine funds from Big Society Capital, the government and other funders. The wholesaler is already talking to other UK-based funders about the fund, Westhead said.
Meanwhile, voluntary sector bodies are still warning that charities will miss out on at least £4.3bn of income over the coming 12 weeks and, along with MPs, are pressuring the government to step in. On Wednesday the prime minister said his government was “looking at a package of measures to support charities as well”.
Yesterday, reports emerged that Oxfam, which employs about 2,100 people in the UK, is to furlough two-thirds of its staff, most working in its trading arm.
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