Jun 20, 2019
Want to invest in an organisation supporting under-served
businesses and disadvantaged communities - and be rewarded with an
attractive tax relief for doing so?
Community Investment Tax Relief is the answer, according to Katy
Ford, chief executive of Foundation East. Foundation East lends to
and supports small businesses unable to access mainstream
Their CITR Investors can receive up to 25% tax relief spread
over 5 years - and unlock affordable finance for businesses which
would otherwise be unable to access it.
In this episode, Katy gives examples of the businesses which are
now thriving thanks to a loan and support from Foundation East;
describes how CITR works (and how Foundation East has attracted
investment); and gives her views on how responsible finance
providers should innovate and collaborate.
Here are the full timings:
- 1:40 Foundation East is a Community Development Finance
Institution, also known as a "responsible finance" provider. It
lends to small businesses unable to access mainstream finance.
- 2:20 Why does Katy do the job she does?
- 3:15 Katy was brought up on Guernsey and became more and more
aware of the divide between "the haves and the have-nots."
- 5:25 Examples of small businesses, unable to access mainstream
finance, which have borrowed from Foundation East.
- 10:31 Why now is an especially interesting time for Foundation
- 11:10 Foundation East is a mutual society with a legal
structure as a “bencom” - society for community benefit. It can
sell shares in the mutual society; those funds are used to invest
in (lend to) small businesses. Foundation East offers 2 types of
shares including Community Investment Tax Relief (CITR)
- 11:40 What is Community Investment Tax Relief? How does it
- 12:30 What are the challenges when talking with potential
investors, or potential advisors to investors?
- 13:25 Comparisons with EIS and SEIS schemes.
- 14:10 The minimum and maximum investment levels for CITR
investments into Foundation East.
- 15:30 Whatever level of investment a member makes they get one
- 16:30 The difference between withdrawal and transferable
- 17:30 Foundation East’s shares were launched on Ethex at the
end of March 2019.
- 18:45 How Foundation East is reaching out to potential
- 19:45 “It’s up to us as a sector to push this tax relief.” How
is Foundation East working with other Responsible Finance
- 22:08 CDFIs have great stories and can evidence the work they
do has enormous impact on people’s lives: jobs created, wellbeing
improved, and more.
- 24:20 The misunderstanding that any business which cannot
access money from a mainstream source is completely wrong says
Katy. Yet sadly some accountants and advisors - and some in
Government - still have this perception. This is why the
Responsible Finance sector is essential.
- 26:00 Foundation East has already attracted over £200,000 via
the CITR share offer. Where’s the money mainly coming from? And has
there been a particularly effective route to market?
- 29:20 How Katy believe responsible finance providers must
innovate and collaborate.
- 31:15 further examples of businesses and social enterprises
supported and enabled by Foundation East.
- 33:50 How to get in touch with Foundation East