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High street bank loans too difficult to access for most charities, says Charity Bank
Howard Lake | 19 September 2013 | News
Research for Charity Bank has found that charities are finding it very difficult to access loans from high street banks. According to the survey of 258 UK charity workers conducted by Charity Technology Trust (CTT) on behalf of Charity Bank, 69% of charities were unsuccessful in accessing loans from high street banks.
Of those charities which had approached high street banks for a loan:
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only 31% ended up taking one
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29% had their application turned down
- 40% were offered a loan but chose not to take it up because it was too expensive or the conditions were too onerous.
Loans for charities
Many charities use loans as part of their business development and to support income generation. The survey found that almost two-thirds (65%) of respondents agreed that loans can help charities further their mission.
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Barriers to borrowing
The principle reasons that respondents gave for not seeking or accepting high street bank loans were:
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too expensive (46% of all respondents, including those who did take loans out)
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belief that their charity was too small to do so (40%)
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borrowing is too risky (38%)
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attitudes of the charity’s own trustees/senior management to borrowing (31%)
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belief that banks don't understand their business needs (27%)
- it is too complicated (23%)
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.