Futurebuilders England is moving towards a funding process that involves less form filling and quicker decision making. Good to their word, a new interest-free loan fund has been announced with those characteristics. Called the Tender Fund, three-year loans of between £3000 and £50,000 will be available to help third sector organisations in England meet the cost of tendering for public sector contracts. The guidelines are quite flexible, and the money can be used to cover tender-related costs such as staff replacement, legal fees, getting professional advice and/or gaining financial expertise.
The Fund has been set up in response to feedback from the third sector saying that smaller organisations in particular find it hard to justify or meet the costs of tendering for contracts when the outcome is not guaranteed. £1 million is available overall, and loans will be interest free as long as they are repaid within 3 years. The amount that can be borrowed is dependent on the size of the contract being tendered for, up to a maximum loan of £50,000.
The basic eligibility criteria are similar to those used for other Futurebuilders investments:
• Applications are invited from voluntary and community organisations, charities, social enterprises, cooperatives and mutuals;
• You must be preparing to tender for a specific public service contract;
• You must be unable to secure a loan of this type from a commercial lender;
• You must be reasonably likely to win the tender and be able to repay the loan;
• You must be working to benefit service users in England.
For the purposes of the Fund a public service contract is defined as “any contract directly held with a statutory body, such as local authorities, PCTs, or Quangos that receive their funding from the state, including Europe”.
The contract can be a new one or the renegotiation of an existing one.
There are two issues that need to be addressed by applicants to this Fund. The first is that this is a loan.
Many people would prefer a grant, but Futurebuilders argues that integrating the cost of tendering into the contract price should be part of your business development. The loan is meant to help with your cash flow, not remove the need for a properly costed contract in the first place. Futurebuilders also believes that if you take a loan it is a demonstration of your confidence in your future financial position.
The second issue follows from the first.
Since this Fund is targeted at organisations seeking tendered contracts, there is the risk that too much support for the third sector alone could be regarded by other sectors as a breach of fair competition rules. A grant would almost certainly be deemed to be stepping over the line; a loan might just be OK. And it is not just an issue across sectors: what if two or more third sector organisations bid for the same contract but for one reason or another only one of them receives Futurebuilders’ support and the others fail in their loan applications? Could Futurebuilders be regarded as distorting the competition? Time will tell and it is likely that this Fund will attract some criticism from those barred from accessing it.
You want to go ahead anyway?
The loans have to be repaid whether your tender is successful or not. You can choose how best to repay, and in what amounts, over the three years of the loan entitlement.
Loans will be allocated on a first-come first-served basis until the money runs out. If it looks as if the demand will be high Futurebuilders will make assessments based on urgency and the quality of your relationship with the potential purchaser.
The application process.
Applications will mainly be processed/assessed over the phone. A meeting might be necessary too. During the calls you will have to provide:
• Reasons for your application;
• Historic financial information and up-to-date management accounts;
• The costs that the loan will be covering;
• The contact details of the purchaser, where appropriate;
• Evidence of why you believe you stand a strong chance of winning the contract;
• An explanation of how you plan to repay the loan.
There is no application. Instead you should call Futurebuilders on 0191 261 5200 or e-mail in**@fu********************.uk
The details are on the Web site at
Closing date: Applications dealt with as received.
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