TONBRIDGE, England, September 20, 2013 /PRNewswire/ --
While charities increasingly need to borrow money in pursuit of their mission, they are often unsuccessful in obtaining affordable finance from high street banks, according to a new survey from Charity Bank.
The survey of 258 UK charity workers was conducted by Charity Technology Trust (CTT) on behalf of Charity Bank, which lends solely to charities, community organisations and social enterprises. It found that almost two-thirds (65%) of respondents agree that loans can help charities further their mission, but the survey revealed that charities often struggle to obtain loan finance from high street banks on terms that are appropriate to their circumstances.
Less than a third (31%) of those who approached high street banks for a loan ended up taking one. 29% had their application turned down and 40% were offered a loan but did not take it up because it was too expensive or the conditions were too onerous.
Furthermore, 46% of all respondents consider high street bank loans too expensive - including those who did take loans out - 27% feel that these banks don't understand them.
The other stated major barriers to borrowing for charities are: our organisation is too small (40%); borrowing is too risky (38%); the attitudes of the charity's own trustees/senior management to borrowing (31%); and it's too complicated (23%).
Patrick Crawford, Charity Bank's Chief Executive, says, "The population of charities, social enterprises and other community organisations that are creditworthy but who cannot secure finance from traditional sources is large. As Government funding is cut, costs rise and donations shrink, the need for borrowing continues to increase.
"Although charities increasingly need to borrow money to help them achieve their mission, they are often unsuccessful in obtaining affordable finance from high street banks, which is putting them off trying. Organisations such as Charity Bank must respond to this increasing need. We have made it our aim to help meet demand by growing our own lending capability."
Notes to editors
About Charity Bank
Charity Bank is a social purpose bank that seeks deposits from socially-conscious individuals and lends solely to charities, community organisations and social enterprises.
SOURCE Charity Bank