# High street bank loans too difficult to access for most charities, says Charity Bank

- Link: https://fundraising.co.uk/2013/09/19/high-street-bank-loans-too-difficult-access-most-charities-says-charity-bank/
- Published: 2013-09-19T13:35:01+01:00
- Author: Howard Lake

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:

 * only 31% ended up taking one
 * 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:

 * too expensive (46% of all respondents, including those who did take loans out)
 * belief that their charity was too small to do so (40%)
 * borrowing is too risky (38%)
 * attitudes of the charity’s own trustees/senior management to borrowing (31%)
 * belief that banks don’t understand their business needs (27%)
 * it is too complicated (23%)

Patrick Crawford is Chief Executive of [Charity Bank](http://www.charitybank.org),
which lends solely to charities, community organisations and social enterprises.
He commented: “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.”

He added: “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.”

_Image: [rejected loan application](http://www.shutterstock.com/pic-128348777/stock-photo-a-close-up-of-a-rejected-loan-application-document.html)
by chrisdorney on Shutterstock.com_

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