A city with a social conscience

Bristol was hailed as the first Social Enterprise city by Social Enterprise UK at the end of 2013 having completed a rigorous application process that illustrated clearly what its citizens already know: that we live in a city with a social conscience. 

At the same time, Resonance was starting a study of the social enterprise (SE) sector around Bristol, which focused on more than 80 social enterprises within the city, by no means comprehensive but finding a combined turnover of more than £4m across 16 sectors including health, education, green energy, media and up-cycling.

A social enterprise is a business that looks at a social problem such as homelessness or youth unemployment, and develops a self-sustaining solution via a business model. The social mission then drives the business by the way it trades and a significant proportion of its profits are reinvested to further the social mission of the business.

Resonance is a social investment company whose mission is to connect investment capital with social enterprise. It does this either by working with individual social enterprises to raise investment, or in some cases by launching impact investment funds, which will allow larger amounts of investment into a particular social issue. It has been working in Bristol for more than five years on projects such as:

·         Bristol Community Land Trust – £1.2m secured loan
·         Low Carbon Gordano – £600,000 underwriting facility
·         Severn Project – £80,000 unsecured loan
·         Fareshare – £70,000 unsecured loan and the UK’s first SITR deal 

While the company was working with Bristol social enterprises on financing, the Government was launching a new tax incentive for investment into social enterprise called Social Investment Tax Relief (SITR).

SITR encourages individuals to invest in social enterprises (defined for this purpose as charities, community interest companies or community benefit societies) by offering investors a reduction in their income tax bill equal to 30 per cent of the money they invest. SITR furthers its support for social enterprises by offering them access to unsecured loans with a three year capital repayment break.

All these factors have now come together in the launch of the country’s first SITR Fund in order to back social enterprise in Bristol. UBS Wealth Management recently announced it would be sponsoring the development of the fund and Resonance is already beginning to talk to social enterprises that need finance and plans to launch for investment before the summer. Eventually, it aims to raise £5m of investment to lend on an unsecured basis to social enterprises around Bristol in amounts ranging between £50,000 and £275,000.

The Resonance Bristol SITR Fund will have a particular focus on social enterprises that help to dismantle poverty and demonstrate growth potential to tackle the very difficult issues that can impact on the lives of those affected by unemployment, homelessness, debt, health, substance abuse, offending and other difficult social issues.   

Formal applications from Bristol social enterprises will be invited shortly, but if in the meantime you would like to discuss affordable finance for your social enterprise, please email Donna Thomas at info@resonance.ltd.uk