Growth Fund Use of Subsidy 2025

Introduction

This report looks at how subsidy funding was used in the Growth Fund programme. The Growth Fund was seen as an opportunity to demonstrate how grant subsidy can be used to develop the social investment market. It focused on offering blended loan and grant financing to Voluntary, Community and Social Enterprise organisations (VCSEs). The research evaluates how the Growth Fund subsidy model blended loan and grant funding so that social investors could offer smaller loans (less than £150,000) to VCSEs.

Findings

The research found that subsidy funding helped charities and social enterprises access social investment they might not otherwise receive. It reduced borrowing costs and made investment more accessible for organisations with limited resources.

The research found that:

• subsidy funding helped organisations manage the cost of repayable finance

• the programme supported organisations that often struggle to access traditional investment

• investment helped organisations grow services and increase their social impact

• social investors and funders worked together to deliver the programme

• flexible funding arrangements supported a wider range of organisations