Community Development Finance Institutions
The social lenders cheering you on.
Looking for funding to take your business to the next level can be a daunting process and fear of being declined can be enough to put some off applying in the first place.
Unlike mainstream lenders like banks, Community Development Finance Institutions (CDFIs) get to know your business and, by taking an in-depth but supportive look at your application, could lend when other providers might not be willing to.
Theodora Hadjimichael, CEO of the trade body for CDFIs, Responsible Finance said:
“Our research shows that 200,000 viable businesses are declined, or discouraged from applying, for finance they need to grow and create jobs annually; this accounts for £4-£6bn of lending each year. A disproportionately high number are based outside London and the South East, and are led by women and Black and Minority Ethic entrepreneurs.
“CDFIs have a superb track record of reaching businesses underserved by mainstream and challenger banks; 9 in 10 of our customers have previously been declined and 85-90% go on to fully repay their loan and succeed (many then become banks’ future customers).”
According to Responsible Finance's 2022 Impact Report, CDFIs advanced more than £228m in UK communities in 2021, a 32% increase on the year before.
Case study: Bay’s Kitchen – Gloucestershire
Award-winning Bay’s Kitchen opensLink opens in a new window creates sauces, soups, stocks, and gravies which are specifically designed for people suffering from Irritable bowel syndrome, as well as people on Gluten free, Dairy free and Vegan diets.
After being declined by its high-street bank, Bay’s Kitchen’s CEO ‘Bay’ Burdett was able to benefit from the Coronavirus Business Interruption Loan Scheme (CBILS) via SWIG Finance, a local CDFI.
The loan, backed by Triodos BankLink opens in a new window, helped the business to expand its product lines and create a new sales and marketing role to support continued growth.
Ben Haynes, Commercial Director at Bay’s Kitchen, said:
“When we initially approached our high street bank for a CBILS loan, they immediately said no without even speaking with us. It is great that SWIG takes the time to understand the business.
“I was impressed with the process, as it matched the entrepreneurial culture we have at Bay’s Kitchen. Our business manager Nicola was a delight to deal with, she really took the time to understand our journey and why we needed finance.”
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