CEF For Businesses

Are you struggling to secure finance? Borrowing from a Community Development Finance Institution (CDFI) could be an option.  

The British Business Bank is increasing the availability of funding for CDFIs under its Community ENABLE Funding programme, so these not-for-profit lenders can lend to more businesses.

What is the Community ENABLE Funding programme?

The British Business Bank Community ENABLE Funding (CEF) Programme is here to help social impact ‘non for profit’ lenders - like Community Development Finance Institutions (CDFIs) - access more funding and reduce financial constraints. This means they can better support small and medium-sized enterprises (SMEs), especially those in underserved communities, by increasing the availability of finance.

What are Community Development Financial Institutions (CDFIs)? 

CDFIs are non-profit financial lenders that offer business loans and support to businesses using a relationship-driven lending approach. They have a strong track record of helping underserved businesses gain access to finance. According to Responsible Finance's 2024 Impact Report, CDFIs provided over £287m  in funding to UK communities in 2023.

How do CDFI’s work?

When assessing a loan application, a CDFI relationship manager will ask for various details, including your business plan and financial accounts. They also take a more personalised approach, considering additional insights gained through discussions with you. In some cases, they may also factor in the potential social impact of the loan, such as job creation.

Why consider a CDFI?

CDFIs are community-focused, flexible lenders that offer several advantages, particularly for businesses struggling to access mainstream finance. Some key benefits include:

• potential loan approval even if you've been declined elsewhere
• a commitment to supporting businesses that face barriers to finance, including women-led and ethnic minority-led enterprises
• They may also provide additional guidance and mentoring to help businesses succeed   .

What are the risks?

As with any form of borrowing, there are risks considering, such as:

• Missing loan repayments (defaulting) could impact your credit rating
• Some CDFIs require business or personal assets be used as collateral, meaning those assets could be at risk if repayments aren’t met
• Business directors may be asked to sign a Personal Guarantee, making them personally liable for the loan.

Is it right for me?

Most businesses, regardless of turnover, or growth stage, can apply for CDFI financing. Before proceeding, consider:   

• Can your business afford the repayments?
• What interest rate will apply?
• What is the repayment timeline?

Eligibility Criteria

To qualify, businesses need to show they are financially stable and meet the lender’s criteria. This includes the requirements of the Growth Guarantee Scheme, which applies to loans funded through CEF.

To apply for a loan, contact one of the Bank's Community Enable Funding accredited lenders.

The Community ENABLE Fund, and the Growth Guarantee Scheme is managed by the British Business Bank on behalf of the Secretary of State for Business and Trade. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA.