Start & Grow
Start & Grow offers investment packages of between £10,000 and £60,000 to social enterprises, community organisations and charities to start-up, develop and expand their enterprising activities. Start & Grow investments are usually made up of one third grant and two thirds loan. The split of grant and loan will be negotiated during the assessment process, taking into account the potential social impacts and ability to repay. Loans are repayable over up to five years (flexible terms can be agreed) and are charged at a fixed interest rate of base rate (currently 0.75%) plus 6%.
Investments can be used for both revenue and capital costs (including set-up costs). Your application must demonstrate that, as a result of our investment, your business will make a difference in the community in which you work, whilst meeting the charitable objects of Resilient Scotland.
Why should I choose Start & Grow?
- Provides flexible investment that allows your business to grow
- One third grant makes the whole investment more affordable
- Simple application process
- No arrangement fee
Still not sure – then read success stories from our Start and Grow Investees.
How do I apply?
If you can answer yes to all the questions on the Eligibility Checklist then call us on 0131 524 0300 to discuss your proposal.
If we see a fit with our outcomes, you will be invited to complete an application form and send us your business plan and your governing document.
We will carry out an initial review of your proposal and business plan to ascertain if it meets the criteria for Resilient investment and demonstrates that it meets our charitable objects. If we decide to progress your application you will be asked to provide the following:
- Two most recent years audited accounts (for established organisations)
- Management accounts for last three months
- Copies of last three months bank statements
- Financial projections for first three years of investment (to include assumed RSL loan repayments)
- Quotes for equipment/vehicles to be purchased with the investment
- Details of your solicitor
- Letter from accountant confirming that:
all HMRC obligations are up to date and not subject to a payment plan
all pension obligations are up to date
no off-balance sheet liabilities exist - Evidence of current public liability and employers insurance
Frequently Asked Questions
Start & Grow is a rolling programme; there are decision-making panels approximately every two months. Your application will be fully assessed and, if it is recommended for investment, it will be considered at the next available decision making panel.
The Resilient Scotland team try to process all applications as quickly as possible. However, the time taken does depend on the quality of information received from applicants and the level of applications received for each round. We will keep in touch with you during the assessment process and let you know when your application is being presented to a panel.
Applicants to Start & Grow cannot receive a grant without also taking out a loan. Investments are usually one third grant, two thirds loan. The split of grant and loan will be negotiated during the assessment process, taking into account the potential social impacts and ability to repay.
The interest rate will be set at the current base rate + 6% (fixed for the term of the loan).
A social enterprise can be a Company Limited by Guarantee with an appropriate “asset lock” and social purpose; it could also be a registered charity. Common types of social enterprises are Co-operatives, Community Interest Companies (CICs), Development Trusts, Credit Unions and Housing Associations.
We define social enterprises as businesses with social and/or environmental objectives whose surpluses are reinvested in the business or to improve their community, instead of maximising profit for shareholders and owners.
Resilient is not currently accepting applications from CIC’s limited by shares, because of the possibility that they may generate financial benefit for individuals, such as shareholders and investors, and this is not compatible with the charitable aims of Resilient or the JESSICA (Scotland) Trust. We are constantly reviewing our eligibility criteria and will update the website and FAQ’s should this situation change.
Your constitution (more commonly known as the governing document or Memorandum and articles of association) must include a clause (dissolution clause) that sets out what you need to do in the event of a decision to wind up or dissolve the organisation. The dissolution clause makes it clear that assets will not be kept or sold for any profit, but passed instead to another charity with the same or similar charitable objects. Your dissolution clause will need to be worded so that it demonstrates your compliance with charity legislation and/or Company Law, depending on how your organisation is incorporated.
Having an asset lock also means that upon winding up, an organisation can only pass what is left in the business to another company (social enterprise, community enterprise or charity) with similar charitable aims. It also prevents assets being disposed of while the organisation is still running for less than their value (e.g. you can’t sell off a £300 laptop to a staff member for 1p).
The primary aim of all social enterprises must be a social or environmental one.
We cannot recommend what constitutes a social or environmental mission, these are different for each organisation, but an organisation’s social or environmental mission must be explicit in the governing documents and you should explain and justify the value of these when applying for investment.
Resilient Scotland is also a charity and must operate within its own charitable objects. You will be asked how you will help us meet our objectives as part of the application process.
This is possible in certain circumstances. For example, if you are proposing to start up a new enterprise or extend an existing activity which will create or sustain employment in one of the 13 areas, you may be able to apply even if your main operational base is elsewhere. If you have answered “yes” to all the eligibility checklist questions but still have doubts about whether you can apply you should contact us to discuss these in more detail.
There are no arrangement fees or legal fees in the normal course of making the loan and grant. Resilient will take a floating charge over each Start & Grow loan and there will be a charge ( less than £100) for registering this. This amount will be deducted from the grant. You may wish to take your own legal advice before signing the charge and this may incur a cost.
In some cases, where particular conditions are imposed, the applicant may have to seek legal or other advice and this may incur a cost.
A floating charge is a security held by a lender which “floats” over all of the company assets (such as stock, office equipment), but which does not interfere with the running of the business. It may be used in particular circumstances (such as liquidation) to allow the lender to recover some money if the assets are sold.
If your organisation is a Scottish Charitable Incorporated Organisation (SCIO) please call us to discuss security requirements.
The conditions precedent will be different for each investment.
If there is other unsecured borrowing (for example, Directors loans), we may ask for a Letter of Postponement to give us comfort that the repayment of the Start & Grow loan will be given priority.
If the loan is for purchase or refurbishment of a property, we may ask to see the relevant planning permissions, building warrants, licenses etc.
You may repay the loan early, there are no fees for doing so, however you should note that if you seek to replay the outstanding loan within the first two years of the term of the investment then you must also repay a proportion of the grant ( this will be detailed in your loan agreement).
You may make larger payments than the agreed monthly payments, but these must be of £1000 or multiples thereof.
Should you anticipate any problems with meeting your loan repayments, you should contact the Resilient team as soon as possible.We will always discuss your particular situation and be flexible in our approach to helping you overcome any financial or cash flow problems if possible. We will do this by using our own expertise, signposting you to others, or by restructuring the debt if possible.
This is no longer a requirement for Start & Grow investment, but if we think that a proposal could be ‘bankable’, then we reserve the right to request evidence that commercial lending has been refused.
You will be required to submit up-to-date information about your finances and your performance on an ongoing basis as part of our monitoring process. This will be different for each applicant, but for Start & Grow will be ‘light touch’, unless the investment is considered to be very high risk. We usually require that you submit financial information and quarterly and budgets and accounts annually.
You are required to inform us of any changes in governance during the repayment term, and we ask that you keep us informed of any significant changes to your business plans or key personnel.
Yes, but will ask to see the Terms and Conditions that apply to other loans, so that we are aware of any restrictions or conditions that other existing lenders may have imposed, in case they affect the terms of our investment. We also ask that you inform us if you intend to take on any new debt funding during the term of the Start and Grow loan.
If there are unsecured loans in the company from Directors or other individuals, we may ask for a Letter of Postponement to give us comfort that the repayment of the Start & Grow loan will be given priority. This prevents organisations from using the Start & Grow investment to repay other existing debts.
Yes.
Some investees have taken Start & Grow investment and have successfully returned to us for further investment. All applications are considered on the same basis, so if the debt can be serviced and the outcomes are sufficient, it is possible.
- Businesses that are insolvent or at the immediate risk of insolvency
- Proposals that are merely to replace existing debt finance
- Subsidiaries of public bodies
- Proposals capable of being fully funded on a commercial basis
- Organisations whose beneficiaries are outwith the 13 eligible local authority areas.
- Proposals that promote religious practices or beliefs.
