Charity Bank raises nearly £5 million in subordinated debt with the help of ClearlySo
Every £1 of equity investment can translate into £8 of lending to charities and social enterprises creating positive social impact.
London, 26 November 2019 – Charity Bank, the loans and savings bank owned by and committed to serving the social sector, has today announced both the successful raise of nearly £5 million in subordinated debt and its plans to attract an additional £10 million in new equity investment from charities, trusts and foundations. This capital will enable Charity Bank to grow its support for the social sector and increase its capacity to respond to a growing demand for repayable finance, including the significant unmet demand for unsecured funding.
Charity Bank has grown its loan book by an average of 28% over each of the past four years and is now seeking to secure further investment to meet its objective of doubling its lending to charities and social enterprises by 2024 and extending its offering to smaller organisations where the funding gap is most acute. As a regulated, deposit-taking bank, Charity Bank can leverage equity investment to multiply its social impact: for every £1 of capital raised, Charity Bank can raise about £7 in deposits from retail savers and therefore lend approximately £8 to organisations delivering positive social change.
This is increasingly important, as 78% of Charity Bank borrowers that took part in its recent social impact study say their project would not have gone ahead without the funding, and 30% said it helped keep their organisation afloat.
Ed Siegel, Chief Executive, Charity Bank, said: “We believe that the current expansion of our investor base represents a potentially very powerful opportunity for many charities, trusts and foundations looking to use social investment as one means to achieve their social objectives. We will leverage every pound of the investment we raise to make around £8 of loans to help charities and social enterprises fulfil their missions and tackle some of the most challenging issues facing UK society today.
“Further equity investment will help Charity Bank become an enduring institution that can continue responding to the needs of the sector and allow more savers to put their money to work for the benefit of society. Having recently made our 1000th loan, we’re now in a strong position to move into the next stage of our growth journey, supported by £10 million in new equity investment and the recent successful raising of almost £5 million in subordinated debt.”
The subordinated debt initiative – which benefited from specialist advice and capital raising support from ClearlySo and Allia C&C as well as the impact wealth manager Tribe Impact Capital – successfully attracted nearly £5 million in long-term capital, raised almost exclusively from eligible individual investors that will benefit from the Community Investment Tax Relief (CITR) that is attached to the offering.
Notes to editors
For further information, please contact:
Sophie Paterson / Amelia Graham
T: +44 (0)20 3890 8127
T: +44 (0)20 7490 9520
About Charity Bank
Charity Bank is the loans and savings bank owned by and committed to supporting the social sector. All its shareholders are social purpose organisations and its ownership, mission, culture, sector knowledge and reputation set Charity Bank apart from other lenders. It uses its savers’ money to provide much needed loans to UK organisations working to drive positive social change – bringing benefits for people, communities and the environment.
Since 2002, Charity Bank has made 1002 loans totalling over £290m to housing, education, social care, community and other social purpose organisations. Charity Bank is owned by social purpose organisations and aims to use its expertise, commitment and flexible approach to lending, to help charities and social enterprises get the support and funding they need.
Registered Office: The Charity Bank Limited, Fosse House, 182 High Street, Tonbridge, Kent TN9 1BE. Company registered in England and Wales No. 4330018. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register No. 207701. The services/products referred to in this document are intended for use by United Kingdom (UK) residents only. Nothing in this press release constitutes an invitation to engage in investment activity nor is it advice or a recommendation and professional advice should be taken before any course of action is pursued.
ClearlySo is Europe’s leading impact investment bank, working exclusively with enterprises and funds delivering positive social, ethical, and/or environmental impact as well as financial return.
Originally founded in 2008, ClearlySo has helped more than 145 clients raise more than £253 million in impact investment from its extensive network of high-net-worth individual, family office and institutional investors.
ClearlySo is headquartered in London.