A quick guide
There are three forms of tax relief relevant to sports clubs seeking finance:
Seed Enterprise Investment Scheme relief is worth 50% to the investor, so someone investing £1,000 will get £300 off their tax bill. Businesses can offer relief on up to £150,000 of investment, but as it’s restricted to start-ups undertaking a new trade, most sports clubs won't qualify.
Enterprise Investment Scheme relief is worth 30% to the investor, so someone investing £1,000 will get £300 off their tax bill. Sports clubs will only be able to claim this if they’re seven years old or younger. If they’re eligible, they can offer relief on up to £5 million of investment. If they’re older than seven years, they have to be raising, in investment, a sum equivalent to half of their average turnover for the previous five years (to work this out, add your last five years' turnover and divide it by 10).
Social Investment Tax Relief offers a 30% return to investors who lend or buy shares in an eligible business (a charity, Community Interest Company or asset-locked Community Benefit Scheme). There's no age limit on this, though businesses older than seven years are restricted to offering relief on around £300,000 of investment, but younger organisations can offer it on £1.5m of investment.
What is it?
Social sector funding has become increasingly common in recent years and can be made as either grants or investment.
Grant funding will typically be available to help on organisations that are set up primarily to deliver social objectives.
Investment from the social sector, on the other hand, uses repayable finance to achieve social impact as well as delivering a financial return to the investor.
If you'd like to understand more about social investment, the Good Finance website has plenty of information and resources.
We've also put together some information about the various types of social sector funding below.
Social sector grants
There are a large number of grant providers in the social sector, both nationally and locally.
These grants can come with conditions such as how it's used and what it helps to deliver.Read more
Some providers include:
Social sector loans
In addition to mainstream finance providers, there are also specialist lenders focused on organisations that deliver a tangible social impact, as well as a financial return.Read more
Examples of social sector banks include:
There are also a number of local Community Development Finance Institutions that provide loans to community focused and socially-driven organisations.
A list can be found here.Read less
Social sector bonds
Social sector bonds offer an alternative to loan funding for larger organisations looking to raise finance of more than £1 million over the medium term.Read more
Social investment funds
Social investment funds provide and use capital to generate social, as well as financial, returns. This can be in the form of both loan funding and equity investment.Read more
Typically, social investment is used to help an organisation grow by covering costs needed to deliver new activities and income streams.
These funds are managed by Social Investment Finance Intermediaries. With examples including: