A package of funding that is a mixture of investment, that needs to be repaid and a grant that doesn’t need to be repaid. For example, a grant of £20,000 alongside a loan of £50,000 that needs to be repaid over 5 years with 10% interest.

When might I use it?

Either as a new organisation needing some grant funding to reach the point where you are able to take on investment and repay it, or as an existing organisation looking to expand but your new activities may not generate enough profit to repay an investment without some grant funding.

Where can I get it from?

From specialist social investors or grantmaking trusts. It’s also possible for organisations to create blended finance themselves by applying for grants alongside loans.

Browse our investors and advisors page to view organisations offering blended finance. 

Pros

  • Bridges the gap between grant funding and investment

  • Reduces the risk that you will not be able to repay investment

Cons

  • Not widely available

  • Only likely to be available for investments of £250,000 or less                                                       

Other considerations

Not all blended finance products in the social investment market are publically available. In some cases, charities or social enterprises may apply to an intermediary for a loan but the intermediary may approach a grant funder to ask them to subsidise the deal with a grant.