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£30m social investment fund launches with funding from Santander

A £30m loan fund for the charity sector has been launched with a £13.5m investment from Santander – believed to be the first time a high-street bank has made a direct investment in social finance. The Third Sector Loan Fund will be run by Social and Sustainable Capital, a social lender set up in 2012. The fund has also received a £1.5m investment from the Social Investment Business and a £15m investment from Big Society Capital. The fund, which says it is now the largest loan fund for the charity sector, will make loans of between £250,000 and £3m to social sector organisations, mainly at rates of between 6 and 12 per cent. It will aim to offer only loan capital, and will not become involved in other forms of social finance such as bonds, quasi-equity or social impact bonds. Nat Sloane, chair of SASC, said: 'What excites me most about this is the mixture of philanthropic and commercial capital. Santander has come in on the same basis it would make an investment in a mainstream fund.' Marcelino Castrillo, managing director of SME banking at Santander, said he expected that other mainstream financial institutions were likely to become involved in the social investment market. He also said he expected the fund to act as a channel to help charities access mainstream finance. 'Banks don't know about this sector and don't understand it so they're reluctant to lend,' he said. 'As a bank this teaches us how we should approach the sector.'

 

Note: News bulletin content has been provided by a third-party and is not the opinion of Santander.

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