Calls to remove obstacles to government backed loans for co-ops and social enterprise
News item
Co-operatives UK, along with 10 other social enterprise support organisations have written to Minister John Glen (Economic Secretary to the Treasury and City Minister) to request a meeting to discuss the barriers co-operatives, community businesses and social enterprises are facing accessing government-backed emergency loan schemes.
Two key obstacles
A joint survey carried out towards the end of 2020 and consistent reports from members and the wider sector, told us there are two key obstacles that block access to Bounce Back Loans (BBLs).
1) Many ethical and social banks that social enterprises bank with do not provide Bounce Back Loans
2) Social enterprises are not able to open new accounts with participating banks
Co-operatives, community business and social enterprises are playing a crucial role for our communities in this pandemic. They are easing the pressure on front line health and care services by producing PPE; facilitating online education and training, providing mental health support, and more. It is clear that the pandemic will continue to affect us all for many more months and social entrepreneurs need to be equipped and supported to keep doing their important work.
Long waiting times and complex processes
The waiting times to open accounts are being quoted as months rather than weeks, and some businesses are being turned away. These delays are being further exacerbated by the lack of infrastructure for co-operatives and social enterprises as they often have complex bank mandates and ‘out of the ordinary’ legal structures, requiring special channels to process loans which can take longer to get through compared to some processes elsewhere. A twelve week wait for a loan could mean a venture is unable to continue operating.
We are asking for a meeting with their team at the earliest opportunity this month so we can agree a way to jointly remove these barriers to the much-needed government-backed loan schemes. We hope that by working together with the government these two obstacles can be swiftly overcome.
Who else has signed the letter?
The organisations taking part are:
Community Leisure UK, Co‑operatives UK, Locality, Plunkett Foundation, Social Enterprise Mark CIC, Social Enterprise Northern Ireland, Social Enterprise UK, Social Value UK, Social Enterprise Scotland, UnLtd, Wales Co‑operative Centre.
