Social Impact Debt Fund IV

Investment Overview

Social Impact Debt Fund IV launched in September 2023 and is actively investing. The fund offers secured loans for asset-backed growth, for borrowers creating an impact in the below sectors:

• Health and Social Care
• Affordable Housing and Homelessness
• Community and Social Infrastructure

The fund offers unitranche loans, which have a single set of terms, instead of a combination of senior bank debt and separate mezzanine debt funding. This means that borrowers are not required to coordinate with complex syndicate structures that delay execution timelines and complicate capital structures.

Eligible borrowers will be established socially impactful organisations in the UK, with a history of revenue generation, profitability and assets to support secured debt.

Social enterprises borrowing from the fund are expected to deploy the funding to improve their financial sustainability and scale-up existing impact.

Please note: Fund IV does not invest in Community Development Financial Institutions (CDFIs), lending businesses, property development businesses, house builders or manufacturers or organisations operating in business areas outside our three core focus sectors.

Investment Webinars

There are no new webinars to sign up for, but more are coming! Watch one of our previous webinars below:

• Watch our previous webinar on property-backed social investment here.
• Watch our previous webinar for Hospices’ wanting to learn more about social investment here.

Investment Details

• Type: Secured Loan
• Amount: Between £1m and £4m
• Interest Rate: Competitive pricing vs. comparable providers
• Use of proceeds: This may include (but is not limited to); the expansion of your services, the upgrade/refurbishment/acquisition of your property, the purchase of your capital equipment, or improvement of your cash profitability
• Repayment: Over 3-5 years (with potential for an initial interest-only period (subject to assessment))
• Security: We require first-ranking security over assets valued in excess of the loan. We lend up to a maximum of 90% Loan to Value (LTV) vs typical bank loan limitations as low as 50% LTV. If you are using property assets as security then you must be hold them for the duration of the loan term
• Costs & fees: 3% arrangement fee. BII legal advice to be covered by borrower
• Support: Possibility of Big Issue Invest input at Board level whilst the loan is outstanding
• Investment Readiness: Big Issue Invest can introduce selected applicants, who meet the appropriate eligibility criteria, for grant funding. You can use this to resolve isolated outstanding due diligence requirements

Secured Loan Eligibility Criteria

• Legal
  • Legally registered in the UK as a company or a charity
  • Fund IV supports all forms of legally incorporated organisations excluding sole trading businesses
• Sector
  • Site-based Health and Social Care – e.g. Care Homes providing nursing and specialist care
  • Affordable Housing and Homelessness – e.g. Transitional Supported Housing
  • Social and Community Infrastructure – e.g. Co-working spaces, Nurseries, Education & Training and Arts Organisations
• Financial Background
  • Established organisation – ideally trading for 5+ years
  • 3 years of audited accounts
  • History of revenue generation, profitability and assets to support secured debt
• Assets
  • Loan must be secured against a property asset of sufficient value with a first ranking charge
• Social Impact
  • Organisations making and able to provide measurable positive social impact for prior trading periods
• Geography
  • UK-wide, with a particular focus on or close to areas of deprivation that have a greater need for support and investment in respect of homelessness and affordable housing, care and hospice services, or improved social infrastructure

Application Process

Our Investment Managers will support you every step of the way of the application process:

1. Submit your application below
2. If your organisation and lending request meets our eligibility criteria, one of our investment team will reach out for an initial introductory conversation
3. If the team are happy, we will advance your application to the initial screening stage
4. If positively screened, the application will go through our pre-due diligence stage
5. If approved by our Credit Advisory Committee at the pre-DD stage, your application will go through our full due diligence process, including us presenting your application on your behalf to our Credit Advisory Committee
6. We will discuss their decision, share feedback, and recommend next steps. If successful, this will include drawing up legal agreements and administering the loan

Please note: Following the submission of an application, the timeline for formal approval is 2-3 months. 

Customer Reviews

Investment from BII in 2020 signalled a new stage in Homes For Good growth and development as a provider of high quality homes for people who need them in and around Glasgow. BII has also enabled us to be more entrepreneurial in our property development programme, ensuring profitability and social impact for the long term.

Susan Aktemel – CEO, Homes for Good Investments

Meet The Team

If you have any questions about the application process our friendly Social Impact Debt Fund IV team are here to help.

James Potter

Investment Director

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James has a background in corporate finance having spent over 10 years advising on stock market flotations and helping large companies with debt financing. In 2015 he moved to the social investment sector where he worked as an Investment Director at Numbers for Good, a social finance intermediary specialising in assisting social enterprises of all sizes prepare the materials that they needed in order to secure social investment. Numbers for Good closed in 2019 and now he’s looking to use the skills and enthusiasm for social investment he built up over that time here at Big Issue Invest. Outside work, James has a busy time with his family including his two boys.

Rebecca Moss

Investment Manager

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Rebecca joined Big Issue Invest in September 2022 as an Investment Associate within the Fund Management side of BII. She works primarily on Fund IV, a unitranche social impact debt fund which will issue loans to impactful enterprises across the UK. Her background prior to social impact investment is in Leveraged Finance.

Disclaimer

“Fund IV” is managed by Big Issue Invest Fund Management Ltd (BIIFM). BIIFM is the alternative investment fund manager (“AIFM”) of the Fund and is authorised and regulated by the Financial Conduct Authority (FRN: 610618) as a “small authorised UK AIFM” in accordance with article 3(2) of the AIFMD to manage unregulated AIFs. The fund is addressed to professional investors only.

Please note that past performance cannot be relied on as a guide to future performance. The capital of Investors in the Fund is at risk. Any target is not a predictor, projection or guarantee of future performance.

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