Government-Backed EFG Scheme - Funding Future Growth

The recession has affected us all and the charity sector

has definitely felt the squeeze. Philip Hall of RBS discusses the

EFG scheme as a possible funding solution.

The Charity Commission's latest economic survey of

charities, published in March 2009, showed that just over half of

the respondents have been affected by the recession, with 30%

suffering from a reduction in income. One third of charities have

put measures in place to combat the effects of the recession,

ranging from additional fundraising to cutting costs*.

For all organisations, including charities, when working capital

becomes – or may become – tight, it's more

important than ever to engage with your bank. Despite popular

belief, there is funding out there for viable charities: it's a

case of making the most of your bank, finding out what funding is

accessible for you and ensuring that you can demonstrate that

borrowings can be repaid.

The Government-backed Enterprise Finance Guarantee (EFG) scheme

was launched earlier this year and is one example of possible

funding. The scheme aims to ensure that smaller businesses,

including charities, with an annual turnover of up to £25m,

have the necessary working capital or investment finance in place

to help them through the difficult economic climate. Under the EFG

scheme, the Government will guarantee 75% of any loans made.

Despite press comment, this is a successful scheme – RBS,

at the time of writing, currently has over £200m of EFG loans

already agreed or in the pipeline.

By speaking with your bank's relationship manager,

you'll be able to find out what solutions are available to you.

Having worked in this sector for some time, we find that many

charities are reluctant to take on debt but your relationship

manager is there to guide you and offer the funding solutions that

fit your specific needs. This can often be more than a simple

overdraft or loan and will allow you to continue to provide the

services and good work you currently do, even if income falls.

For instance, RBS recently backed the charity and social

enterprise, Charity Technology Trust (CTT) with funding from the

EFG scheme; this provides a good example of how the scheme can


Based in London Bridge, CTT was launched seven years' ago

and provides charities with a range of services, such as

e-communications and payments services, designed to increase

efficiency in the core areas of activity: fundraising, campaigns,

communications, finance and IT. Over the past...

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