Bridging loan scheme a huge success
Eighteen months after its introduction, the interest free Capital Works Bridging Loan Scheme has been hailed a huge success by volunteers working in community hall committees, pier trusts, sports groups and many other community groups.
The £1 million scheme was introduced in spring last year to alleviate the pressure on groups that were experiencing cashflow problems when waiting for funding under the Scotland Rural Development Programme (SRDP) to come through.
SRDP funding is only released once work has been completed and invoices paid, creating an almost insurmountable financial burden for many voluntary organisations.
Chairman of the Sandness Public Hall, Donald MacLeod, said he was convinced that the recently completed £168,000 refurbishment of the local hall would not have happened without the helping hand of the charitable trust.
The trust provided £100,000 on a loan basis to help bridge the time between paying the builders and receiving the various instalments of their £144,515 SRDP grant.
Mr MacLeod described the scheme as “just brilliant”, adding: “You need to pay your contractors first and you also need a bank statement showing that the money has left your account before the SRDP funds are released. It then takes between six and eight weeks before the grant funding arrives in your account.
“There is no way on this earth that any public hall could finance such a thing. And going to a bank for a sizable bridging loan is also impossible since we don’t have any equity to offer: we just have a building site.”
His views were echoed by Tony Erwood, the chairman of SBFS Property Ltd, the company that was formed by the Shetland Bus Friendship Society to build the new Scalloway Museum.
The £814,000 project is supported by a grant of up to £392,000 under the SRDP scheme and meant that two bridging loans totalling £345,000 were needed in order to manage its cashflow.
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Mr Erwood said: “Without the bridging loan the project would have folded due to cashflow problems and there would be no new Scalloway Museum.”
The project received its first instalment of SRDP funding only in October, four month after the external work had been completed.
Since spring last year, Shetland Charitable Trust supported eight projects with bridging loans totalling just over £950,000, enabling projects worth more than £2.6 million to progress.
Three community groups have already repaid their bridging loans in full, and the funds have now been made available to lend for other projects.
Chairman of Shetland Charitable Trust, Bill Manson, said the scheme was the perfect example of how the funds held in the charitable trust were used to the benefit of the whole community.
“The administration rules of the SRDP funding programme are creating some real headaches for many groups working so hard to achieve the aspirations of their communities.
“I am delighted that we are able to make a difference at very little extra cost to them and to the trust.”
Any community groups interested to benefit from the Capital Works Bridging Loan Scheme should contact Mary Anderson, Shetland Charitable Trust, North Road, Lerwick, Telephone:01595 744 992 or e-mail:
mary.anderson@shetlandcharitabletrust.co.uk
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