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%).
From: Charity Technology Trust
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