Lending To Social Ventures

Existing demand for finance and the potential roles of social investment

Authored by: Fergus Lyon

Routledge Handbook of Social and Sustainable Finance

Print publication date:  June  2016
Online publication date:  June  2016

Print ISBN: 9781138777545
eBook ISBN: 9781315772578
Adobe ISBN: 9781317678830


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There is a growing interest in the provision of Social and Sustainable Investment and loan finance for social enterprises and other social purpose organizations. These organizations, operating at the intersections of the commercial world and civil society, face particular challenges with tensions between their social or environmental objective and the financial imperative of running a business. These tensions become particularly apparent when examining the use of repayable loan finance (Doherty, Haugh, & Lyon, 2014). social investment is financed by investors that seek opportunities to lend to organizations that create social value at the same time as generating a financial return (Nicholls, 2010). It has become a focus for policy around the world, but particularly in the UK where it was selected as a key theme to be promoted by the UK’s presidency of the G8 in 2013. In this chapter we specifically focus on the use of repayable loan finance that might come from specialist Social Investors or from conventional sources such as banks. This is distinguished from other forms of finance such as retained profit/surplus, investment from owners/staff, or grants.

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