The British Business Bank accredited Social Investment Scotland with £3.5m on 30 July, making it the eighth Community Development Finance Institution (CDFI) on the Bank's books and the first with a dedicated Scottish remit1. CDFIs are not-for-profit lenders that write loans to businesses high-street banks decline. Social Investment Scotland will lend between £25,001 and £125,000 a time. Three weeks later, on 20 August, the Bank doubled its facility with the Kettering lender Performance Finance to £30m, funding leases and loans for dentists, vets, opticians and solicitors2.
Neither cheque is large, and neither will be reported as venture capital, which is the point of them. A dental practice buying a chair and a Glasgow social enterprise borrowing £40,000 sit outside every equity instrument the Bank runs. The wholesale route reaches them by lending to the lenders who already know them, and the Bank's exposure is to the intermediary rather than to the borrower.
Set beside the £157m the South West Investment Fund has now deployed across 283 businesses and the £6.5bn of guaranteed lending signed in July, the Bank is running four instruments in parallel: cornerstone equity, commitments into other people's funds, pension co-investment and wholesale debt. One of the four still has no published criteria. The £100m aerospace supplier fund proposed at Farnborough has produced no follow-up since 21 July, when the Bank said structure, investment criteria and delivery route were all still being developed3.
