Thursday, April 16, 2015

News: Key Fund to invest £5m


Sheffield-based Key Fund, the country's most prolific investor in community and social enterprises, aims to invest £1m every month for the next five months across Yorkshire and the Humber.

Established in South Yorkshire in 1999, Key Fund has pioneered an approach to revitalise communities decimated by the collapse of the coal and steel industries. By first administering small social capital grants, under £10,000, to support community economic development and then moving into social investment products, with a focus on increasing financial and impact sustainability.

All Key Fund clients have been turned down by mainstream investors because they don't fit their lending criteria. Key Fund has directly invested over £35m since 1999, with an enviable track record in business success and an average loss rate of only 4.4% – despite its investments being higher risk on paper.

The latest call sees Key Fund offering a loan and grant blend to help finance new business ideas or existing business growth. Grants will be at the discretion of the Key Fund, but typically make up 10% of the loan taken.

Garry Brown, head of investment at Key Fund, said: "We're asking anyone living in Yorkshire and the Humber who has an idea, or is involved in a group, organisation, enterprise, or community with an enterprising idea, to talk to us.

"Many people who want to start their own community or social enterprise, or expand and grow an existing one, aren't aware that there is an alternative to mainstream investors. With us, you don't need assets or even necessarily experience, you just need a fantastic business idea that benefits society."

Key Fund specialises in relationship based lending, free from credit scores or blanket rules. They work with applicants and give hands-on support and advice to help give their business the best possible chance to become sustainable.

Garry added: "Social enterprises – which basically means a business whose purpose is to benefit society – struggle to gain the confidence of mainstream investors. As the sector grows there is increasing interest and plenty of passion, but start-ups and young businesses need support, guidance and investment in order to flourish. That's where we come in."

The organisation believes community and social enterprises not only reignite local economies, but are best placed to tackle social problems, meeting the demands of the communities they are rooted in, from community-owned pubs, to home-care services, to high-tech renewable energy solutions.

Key Fund website

Images: Key Fund


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