Social Enterprise Investment Fund (SEIF) Guidance Notes

Transcription

1 Social Enterprise Investment Fund (SEIF) Guidance Notes

2 Table of contents Section 1 Context & Eligibility 4 About the SEIF 4 The Strategic Context 4 SEIF Objectives 5 DH s Information strategy 6 Who can apply? 7 Key Investment Information 8 Section 2 - Application Form Guidance 11 Initial Checklist 11 Contact Details 14 Who is the main contact for your organisation? 14 About your organisation 14 Your organisation and your proposal 14 Your proposal and its social impact 16 Your proposal and other department of health service priorities 18 Funding required 19 Management and governance 20 Bankability 22 State aid 22 Finances 23 Project plans 24 For capital developments or building works 25 For property or land purchases Equality Act 26 2

3 Previous / Other Applications 27 Declaration 27 Supporting Documents 27 Section 3 - Social Impact 28 What is the difference between outputs, outcomes and impact? 29 Section 4 Cashflow Forecast and Income and Expenditure Guidance 30 How to use the templates 30 Section 5 - State Aid Questions and Answers 31 Section 6 - How the Process works 31 How to apply 33 How your application will be assessed 33 Bankability and being able to fund the project yourself 34 Section 7 - Acceptance, drawdown, monitoring and unsuccessful applications 35 If you are offered an investment 35 Acceptance 35 Drawdown 36 Monitoring 36 What is monitoring? 37 Why monitor? 37 If you are not successful in your investment application 37 3

4 These guidance notes have been created to help you in your application to the Department of Health s Social Enterprise Investment Fund (SEIF), managed on its behalf by The Social Investment Business and Local Partnerships. They provide general information about the fund and its aims as well as describing the information required to answer each question in the application form. It is important that you refer to these notes when completing the application form and follow the guidance given. SEIF funding for pre or post spin-out organisations is processed by our delivery partner Local Partnerships. If you are one of these organisations none of the information in this guidance applies to you, but please do contact Local Partnerships (call or seif@local.gov.uk) for further information. A spin-out is a group of public sector workers who have come together to establish a standalone social enterprise outside of the public sector, with the aim of delivering improved public services. Some spinouts have followed the Right to Request or Right to Provide policies. Some are in development while others have launched. As a spin-out will provide services historically provided from within the public sector they will typically be awarded a contract for services as part of the spin-out process If you have any remaining queries about the application form or how to apply after reading this guidance, or if you have any particular communication needs (such as Braille, large print or a hearing impairment) please contact us on or info@thesocialinvestmentbusiness.org. (Opening Hours: Mon, Tues, Wed and Fri Thurs). Section 1 Context & Eligibility About the SEIF The SEIF aims to support the delivery by social enterprises of innovative health and social care services and products and to invest to help social enterprises to become sustainable in the longer term. The Strategic Context The Government's vision for reform in health and social care services includes developing a provider market that is increasingly plural and diverse. This sets the context for new kinds of organisations to 4

5 emerge, including social enterprises (SEs), providing more choice for patients and better quality, more responsive services. A social enterprise is defined as a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or community; rather than being driven by the need to maximise profit for shareholders and owners The White Paper, Our Health, Our Care, Our Say, included a commitment to establish a Social Enterprise Investment Fund (SEIF) in April This was 'to provide advice to social entrepreneurs who want to develop new models to deliver health and social care services' and to address 'the problems of start-up, as well as current barriers to entry around access to finance, risks and skills, to develop viable business models'. Since its publication, there has been a wider Government push on social enterprises and third sector public service delivery. Subsequently, the new Office of the Third Sector in Cabinet Office published the Social Enterprise Action Plan and the Third sector Action Plan. These documents give stronger impetus for social enterprise development and support in the health/social care sector and raising expectations. The intention is to provide sector specific support for the SEs emerging in health and social care. The SEIF aims to stimulate the development of SEs in health and social care with financial support for start-up costs, and through addressing the current gaps in information, advice and support, investing in existing SEs to support and encourage expansion into the health and social care sector. SEIF Objectives The objectives of the SEIF are: To stimulate social enterprises in health and social care spinning out of the public sector To develop capacity (particularly for commercial capacity and support with bidding) and enable growth organisations that deliver health and social care services. To encourage social impact by investing in health and social care organisations that are able to report high social impact of their delivery To ensure that SEIF investments are in line with current DH policies and strategies The SEIF 2012/13 investment aims to support the following service priorities: 5

6 Proposals that demonstrate high social impact Right to Provides and Right to Requests that have not yet launched or have never previously received SEIF funding For the Revenue allocation: Capacity building support, particularly for commercial capability and support with bidding For the Capital Allocation: Integrated health and care provision, including supporting DH s information strategy Home or community based support (including provision for mental health, learning disability, care for frail older people with multiple / complex needs, end of life/palliative care) that prevents or reduces acute care, long-term residential care or in-patient facilities. Timebanks and other reciprocal arrangements Personalised services If sufficient funding is available, the SEIF will also fund proposals which fall outside the priorities if they meet the other fund criteria. DH s Information strategy Purpose of the Information Strategy is to increase access to new and developing forms of information that promote choice and control so people are actively engaged in their health and care, as citizens and members of communities. We are keen for projects that: reduce the digital divide for health and care gain; develop skills in locating and using a variety of high-quality health and care information; create new ways of providing people with health and care information and advice using combinations of approaches and mechanisms, including brokerage models, in integrated ways; develop information technology applications that help to join up care efficiently and effectively to support individuals, their families, carers and communities; or 6

7 support individuals, their families and carers to make choices about community and mental health services that are offered as part of the support for the planned roll out of Any Qualified Provider for a range of these services from Investees must be organisations providing services that: deliver health and/or social care outcomes and can demonstrate the social impact of their proposal meet the requirements of the 2010 Equality Act and can confirm that their proposals are not discriminatory. help meet the aims and targets of the SEIF have a clear evidence base for the proposed interventions. The SEIF only supports proposals for which funding can be drawn down and spent this financial year, by 31 March Funding is not available for pilots or efforts to establish proof of concept. We are seeking to support organisations and proposals that will generate income from sustainable sources in the long term. Who can apply? What the SEIF will fund What the SEIF will not fund Organisations that are a social enterprise, including small and micro enterprises, principally delivering health and / or social care outcomes and are either an unincorporated association, trust or company set up and registered as a charity an unincorporated association set up as a voluntary or community group a community interest company a not for profit company limited by Individuals and sole traders Organisations that distribute profits for private benefit Statutory organisations such as schools or local authorities Pilots or time limited initiatives Organisation that are applying on behalf of other organisations Organisations that are in poor financial health 7

8 guarantee a community benefit society And whose ultimate beneficiaries are in England (although the organisation may be based outside of England) are unable to secure funding for the total cost of the proposal from a commercial funder or unable to fund the total cost of the proposal from unrestricted reserves have board approval for the project and have considered the security available for a loan and whose proposals help meet the objectives of the SEIF(including proposals for support with children s social care) Organisations that have not satisfactorily managed investments from the SEIF Organisations unable to clearly articulate who their beneficiaries are and /or provide reasoned evidence to support the anticipated social impact of their proposal Proposals which cannot demonstrate social impact or can only demonstrate low social impact Applications for investments below 30,000 Proposals which if successful will not be able to spend the funding this financial year i.e. before 31 March 2013 Organisations that are not compliant with the 2010 Equality Act Organisations whose ultimate beneficiaries are outside of England) Key Investment Information These are the key facts you need to know about the investments we will make. Your proposal needs to fit this structure and your organisation needs to meet these criteria. Please be sure that this is the case before you make an application. Investment Size 30,000 Minimum The maximum is subject to the limitations of the SEIF 8

9 budget. However, due to the limited funding available we would not expect to see individual investments in excess of 1m. Investment Products Standard Loans The minimum loan amount is 20,000 Capital Grants The maximum capital grant is 150,000 Revenue Grants The maximum revenue grant is 50,000 Loan/grant split The SEIF offers loans and grants and the approach is to tailor a package of investment to meet the specific needs of each investee. The investments include loan finance and /or nonrepayable grant. Priority will be given to applications which include a loan element of a minimum of 20K or 30% of investment whichever is the higher (see also co-funding below) Co-funding Priority will be given to applications that include co-funding where the value of the co-funding is 20,000 or 30%, whichever is the higher, of the SEIF application. Timescale Organisations must be able to spend funds by 31 March This means that you will need to submit evidence of expenditure by early March in order to allow time to process the draw down. Any funding that cannot be evidenced in time to draw down funds in advance of the 31 March 2013 will be withdrawn. Loans 9

10 What can I use the SEIF funding for? Loans can cover either capital asset costs (for example building purchase, construction or refurbishment) or development capital (funding needed to support an organisation through the early stages of a scheme before it can generate income). Property - Loans for organisations that need to buy lease and/or refurbish property. Investment in property deals where there is a clear link to contracts and drawdown beginning within six months of offer. Development Capital - Loans for organisations that need funds to invest in more staff, service development or other development costs ahead of forecast income. Working Capital - Loans for organisations that are growing but struggling with cash flow. Funds are not provided to cover past debt but to prepare the organisation for an anticipated bridge between the need for funds and income from a public fundraising campaign, sale of existing premises, grant aid, contract income, etc. Mergers and Acquisitions - To support growth through the implementation of a merger or acquisition. Loan funding can be used to meet working capital costs, but any revenue expenditure from working capital must be incurred and evidenced prior to 31 March 2013 to enable draw down before this date. Capital Grants These are to help meet all or part of the cost of tangible resources such as buildings, vehicles or equipment. Revenue Grants Revenue grants, other than for the purpose of providing support 10

11 for commercial capability building and/or bidding, are not available as a standalone investment. Revenue grants may however be offered as part of an investment package. Due to the limited amount of revenue funding available it is unlikely that any applications for a revenue grant, other than for the priority of providing support for commercial capability or support with bidding, are likely to be successful. Section 2 - Application Form Guidance There are word limits in place for a number of questions on the application form. It is important that you do not exceed the word limits as words in excess of these will not be considered as part of your application. Please insert your details accurately and complete all the relevant sections of the form. If you do not answer all of the required questions and / or do not send the required supporting documents your application will not be considered. Initial Checklist The fund is open to organisations that meet all of the following criteria: 1. Is your organisation a social enterprise? Your organisation must be a social enterprise according to the Government definition a business with primarily social objectives whose surpluses are principally invested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners. This should be explicitly stated in your governing documents. 2. Is your organisation providing or seeking to provide health and / or social care services? The Department of Health s SEIF can only provide funding for organisations that provide, or are seeking to provide, health and social care services. This includes public health, adult social care and children s social care, the latter being the responsibility of the Department for Education. 3. Is your organisation able to clearly demonstrate and evidence social impact? Your organisation needs to be able to clearly articulate the tangible impact it and the proposal will deliver and provide evidence of the impact. Social impact is defined in section 3 of this guidance. 11

12 4. Are your services being delivered solely to people living within England? The SEIF is only open to those organisations where all the beneficiaries of the services being funded live in England (although the organisation may be based outside of England). 5. Are you able to drawdown and provide evidence of spend for all the funding requested by the 31 March 2013? This round of investments is from our budget and under HM Treasury rules must be distributed and spent by the end of the financial year. 6. Does your organisation produce business and financial plans on a regular basis? Your organisation should produce sensible business and financial plans that are well developed tested and achievable. 7. Has your proposal been agreed by your board and would they be able to accept any investment offer by no later than 14 December 2012? Our aim is to provide funding to organisations and proposals that will be sustainable in the longer term; a key aspect of this is that the planned project should fit with the strategy of your organisation as set by your board / non-executive Directors. 8. Are you unable to access commercial funding for this proposal? The SEIF will not fund proposals that are able to access commercial finance for the full cost of the proposal. We would expect that you have first approached and been turned down by your bank for all or part of your investment proposal and will require evidence from your bank to support this as part of the assessment process. The SEIF can fund the portion for which you are unable to access commercial finance and will prioritise applications for co-funding, including from a commercial lender. 9. Are you unable to fund this proposal from your own reserves? The SEIF will not grant fund proposals that could be funded from free cash reserves built up by your organisation. Where you have strong reserves we would expect the Board to have considered whether the proposal could be funded from reserves, or the level of contribution that could be met from reserves, before applying to the SEIF. This assessment would necessarily take into account the reserves policy of the organisation and future investment plans. If sufficient reserves are available, it is likely that any form of investment would be as a loan. 12

13 10. Investment packages may include a loan element: We will assess the affordability of loan finance in all cases, and may offer you a combined loan: grant investment if we feel that this would work well, taking into account projected surpluses, the security of future income sources, the size and track record of your organisation. Do your organisation s governing documents allow you to take on loan finance? It is important that you check that your organisation is able to take on borrowing before you apply to us. This should be explicit within your organisation s governing documents. This is normally included in the powers of the Board, which will include the power to borrow and to offer the organisation s assets as security. Has your Board confirmed willingness / ability to take on a loan? It is important that your Board has given due consideration to taking on loan finance prior to making an application to the SEIF. Given the tight deadline for acceptance if an offer is made, we need to know that the Board has already considered the possibility that any investment will include a loan element, and has completed a risk assessment sufficient to enable the Board to sign-up to accept a loan at a Board meeting such that an offer can be accepted by 14 December 2012 latest. Are you able to offer security which will cover the proposed investment? Security will be taken wherever appropriate but not normally for investments of less than 200,000. If you are applying for a loan of over 200,000 we will take meaningful security over the assets of your organisation to cover the investment amount. Please ensure that security can be offered. 11. Having considered the State Aid implications of seeking the SEIF investment are you satisfied that the application, if successful, would be compliant? Please read the guidance on State Aid thoroughly before submitting an application. You must be sure that your application is compliant as the SEIF will not fund proposals that exceed State Aid limits. 12. Is your application consistent with the principles of the 2010 Equalities Act? The Equality Act 2010 is the law which bans unfair treatment and helps achieve equal opportunities in the workplace and in wider society. The specific duties and regulations are available on the website of the Government Equalities Office: 13

14 Contact Details Who is the main contact for your organisation? This should be the key person involved in your proposal and application. They should be able to talk about your proposal in detail and be able to supply contact details for someone who has expertise on specific areas, if required. It is very important to us that you provide the correct and phone number. We expect to be able to reach the main contact at the main address, and at the phone number quoted in the application form during the working day. If the address where you are based is different from your registered address, please ensure you provide these details as well. Please let us know if the main contact has any particular communication needs. We use for communication for environmental reasons. If this will cause problems please tell us your preferred alternative. It is very important that your addresses are correct and that your account is active and checked regularly. About your organisation We need full details of the organisation requesting the investment so that we can carry out due diligence checks. Your organisation and your proposal 1. Please tell us what the overall mission of your organisation is and the health and social care services and/or activities you provide to achieve your mission? (max. 300 words) In answer to this question you should cover the following: what your core aims are what you want to change and achieve how your mission and aims are connected to the activities you provide including whether your organisation pursues a policy of boosting the local or beneficiary economy, for example, through providing a significant boost to the local economy or through a policy of hiring or spending within the local or beneficiary communities. 14

15 how the activities you deliver connect to the changes you are seeking for your beneficiaries what impact your organisation has and the services/products you provide, including the health and social care outcomes that are delivered as a result. You should include comment on the growth your organisation has achieved in the past year with reference to the targets and objectives your organisation has met. 2. How long has your organisation worked in this market: what is your track record of working with the proposed beneficiaries and delivering these services? (max. 300 words) We expect your organisation or the key people involved in your proposal to have a successful track record in the delivery of the proposed services, of working with the proposed beneficiaries and delivering high social impact 3. With reference to the guidance notes, please describe how your organisation is Investment Ready. (max. 300 words) In order to invest, a risk assessment will be carried out on each application. This will determine the investment readiness of a proposal which itself will be based on a unique combination of factors, which may vary in their weighting. Many potential Investees apply at a stage where they are not investment ready. It is important that time is not wasted by supporting organisations that have a low likelihood of receiving an investment. In particular, confidence is required in the people as they deliver success for both themselves and the SEIF. Put at its simplest, an investment ready organisation has: a) The right people to win and deliver contracts run the organisation competently and work with the Fund Manager. This includes a strong board and executive team and good systems, particularly financial management. b) Services, either now or in development, which will be purchased within 6-12 months of an investment. This means services that are well defined, well delivered and likely to be bought by commissioners i.e. the organisation can demonstrate knowledge of its marketplace. c) A sensible business and financial plan that is well developed tested and is achievable. 4. Please summarise your proposal. Describe the beneficiary needs that you have identified and how the planned services/products will address these. (max. 500 words) 15

16 Essentially what you want funding for, what you will do with this funding, who with, how and what difference it will make. 5. How will the proposal make a significant improvement on what is already available? Please describe how you identified the need/demand for the proposal with reference to existing provision. (max. 300 words) We need to understand the driver behind this project why is it needed? Has the market changed from a demand/commissioning or competitive point of view? If so, how will this project benefit the organisation s position with respect to the change and the overall offering to the beneficiaries. What is your Unique Selling Point (USP)? Your proposal and its social impact The department of health has set a strategic priority of funding applications that can demonstrate high social impact. This includes addressing health inequalities and/or protecting and improving health and well-being. All applications must therefore demonstrate high or medium social impact of both the organisation applying and the proposal for SEIF funding. Any organisation and/or proposal that is unable to demonstrate social impact or only demonstrate low social impact will not be considered further. Further information on social impact will be available at the applicant workshops or by visiting the social investment business website Which communities/population groups is your organisation and proposal aimed at? What prior experience does your organisation have of delivering high social impact to this/these group(s)? (max. 300 words) Please describe: Who your beneficiaries are and the numbers you work with now and are aiming to work with in the future Your understanding of the needs of your beneficiaries how you identify the beneficiaries you work with and assess their needs and whether you are focusing on specific aspects 16

17 How the project you are applying for funding for will lead to improved services/activities for your beneficiaries How you make beneficiaries aware of your services, consult them and measure their satisfaction with your services/impact How and why you engage with other parties to meet these needs, e.g. other organisations working on the same or similar issues / with the same beneficiaries, government, local authorities: Any trends or changes in the sector that you are working on that you have identified or are trying to adapt to 7. What impacts do you expect your organisation and the proposal to have if this application is successful? (max. 500 words) We want to know what the health and social care outcomes are and the impact your proposal will deliver as a result. You should focus on what happens to the lives of your beneficiaries as a result, what are the changes and how they benefit from your services. Please tell us what you, as an organisation do to ensure your services deliver high social impact. What is it that your organisation does that makes a difference? 8. When would these impacts be realised and for how long? Are they sustainable? (max. 300 words) Please tell us how soon after being awarded the SEIF investment your proposal will start to deliver these impacts and outcomes. Are they time limited or enduring. 9. What evidence can you provide to demonstrate/support your answers to questions 7 and 8 above about the expected impact (max. 500 words)? Your answer should cover the following areas: a) A description of how you monitor and evaluate the impact of your work. What, if any, impact measurement and reporting you carry out including the indicators you use to measure your performance and how you report on your performance? b) What outcomes have you achieved in the last 3 years, e.g. key events and achievements? Any improvements you have made in your performance and/or your operations? 17

18 What evidence can you provide to demonstrate this e.g. comparison within the sector accreditation? c) How do you learn from your results/feedback and how do you use this information to improve your performance? How do you review performance, operations, governance, mission and aims? What approach you take to planning and implementing delivery of services and implementing changes? How you ensure that you respond to external changes/opportunities, e.g. policy, demand, changing needs of beneficiaries? Your proposal and other department of health service priorities 10. Having demonstrated social impact, please explain how your proposal aligns with any of the other Department of Health SEIF investment priorities as given in the guidance notes. (max 500 words) Priority will be given to those applications that demonstrate high social impact and align with these service priorities. If your application does not align with any of the priorities you should explain why it does not. During , SEIF investment decisions will be made in accordance with the following priorities. Applications should therefore demonstrate an understanding of how the project aligns with these investment priorities: capacity building support, particularly for commercial capability and support with bidding, integrated health and care provision, including supporting DH s Information Strategy. The purpose of the Information Strategy is to increase access to new and developing forms of information that promote choice and control so people are actively engaged in their health and care, as citizens and members of communities. We are keen for projects that: reduce the digital divide for health and care gain; develop skills in locating and using a variety of high-quality health and care information; create new ways of providing people with health and care information and advice using combinations of approaches and mechanisms, including brokerage models, in integrated ways; develop information technology applications that help to join up care efficiently and effectively to support individuals, their families, carers and communities; or support individuals, their families and 18

19 carers to make choices about community and mental health services that are offered as part of the support for the planned roll out of Any Qualified Provider for a range of these services from 2013). innovations that keep people out or take people out of acute hospital settings, long term residential care or in-patient facilities by providing home or community-based support, including services for mental health, learning disability, frail older people with multi/complex needs and end of life/palliative care; timebanks and other reciprocal arrangements; and personalised services. Funding required 11. Please complete the table below, making clear the loan:grant split of the amount requested from SEIF. Please note priority will be given to applicants for loans and or that demonstrate co-funding (contributions from other funders subject to the minimum amounts set out in the guidance notes): The table should be completed as follows: SEIF Amount Requested: this is the amount of funding you are requesting from SEIF in this application. Contribution from reserves: this represents the project costs that will be absorbed by your organisation without recourse to other funding sources; an amount that will effectively come from your organisation s reserves. Any contribution by a group company (e.g. parent or subsidiary) should also be included here. Contribution from other funders (co-funding): This is the amount of cash funding towards the total project costs to be provided by third party sources. This could be grants, donations, or loans attained specifically for the project. 12. The table shows the loan element you are requesting as part of your SEIF investment. Please explain how you would service a loan at this level making reference to projected surpluses, reserves and current borrowing. Interest on loans is fixed for an initial 3 year period at 6%. The minimum repayment term we would consider is 6 months, and the maximum is 25 years. The loan term will depend on the type of expenditure the loan is funding. In the case of fixed asset purchase, the loan term will usually mirror the useful economic life of the asset. For working capital this would normally be a maximum of five years. 19

20 Where necessary, we may agree a repayment holiday at the beginning of the loan term to allow time for your proposal to become properly established before repayments begin. Before applying, we would expect you to have critically analysed your own financial position and forecasts. To do this you will need to perform sensitivity analysis on your projections and consider the security of future income streams, and take into account your organisation s reserves policy and current level of reserves, future investment plans and current borrowing. Your answer should provide the key numbers arising from this work. We should be able to easily link these to the supporting documentation submitted, i.e. annual accounts, management accounts and cashflow forecasts. 13. Please complete the table outlining other funding you have received or are seeking? If your proposal is reliant on other sources of funding (this includes contributions from cash reserves) we need to know how secure these are and that all funding can be accessed in line with the SEIF deadline for drawdown of 31 March We are happy to provide funding alongside other organisations but you must provide evidence of secured funding before we make a formal offer. Management and governance 14. Please give details of your Trustee Board / Board of Directors and Senior Managers / Key Staff including their skills and experience. Please ensure you include staff members with key responsibility for financial management. A key objective of the SEIF is to provide funding for organisations and services that are sustainable, or moving towards sustainability. One of the most important factors underlying sustainability is that there is a strong governing body. The Board of Trustees / Directors should have the right balance of skills and experience to lead the organisation, ensure operational effectiveness and act in the best interests of the organisation and its beneficiaries. In addition, leadership and staff should have the appropriate skills, knowledge, qualifications and experience to deliver the organisation s vision and mission. Details should include a brief summary on the people and how their skills and experience relate to this particular organisation and project. 15. How often do your Trustee Board / Board of Directors meet? (max. 50 words) How many formal meetings of the Board take place per annum? Are these at regular intervals or ad hoc? 20

21 16. How do your organisation s internal policies and procedures demonstrate that your organisation adheres to principles of responsible management? (max. 100 words) We are interested in finding out how your organisation implements its internal policies and procedures to verify these are carried out in a socially and environmentally responsible manner. Please describe how in implementing internal policies and procedures your organisation demonstrates responsible management principles and techniques, for example, through Employment, Volunteer and Environmental Policies. 17. Please describe how the Trustees / Directors engage with the organisation apart from through Board meetings. (max. 300 words) We are interested to know how the Board communicates and engages with the organisation outside of Board meetings. This may be through involvement in sub-committees and special projects. How do the Board use their skills and experience from previous and existing roles to strengthen the organisation and help progress projects successfully. 18. Please describe how Trustees / Directors / Senior Managers and key staff engage with staff and beneficiaries. (max. 300 words) As above, we would like to know how those responsible for strategy engage with provision on the ground: this might be through user representation on the Board, staff and user surveys, involvement in sub-committees with Trustee, staff and user representation, volunteering, attendance at staff meetings, user events etc. 19. Please describe your financial management controls, as follows: i) How often do you produce management accounts? (10 words) ii) What statements are included in your management accounts (i.e. Budget, Income & Expenditure, Balance Sheet, Cashflow Forecast)? (20 words) iii) Who produces management accounts (job title, experience and qualifications)? (100 words) iv) Did this person produce the cashflow forecast and financial information to support this application? If no please describe who produced these: (10 words) 21

22 v) How are management accounts reviewed within the organisation? (50 words) We need to know that any organisation to which we award funds has robust financial controls in place, not only to make sure that the investment is properly spent and accounted for, but also because these financial controls are key to safeguarding sustainability. Post-investment, we will need you to submit your management accounts on a regular basis as part of our routine monitoring and we need to know that you will be able to comply with this requirement. Bankability 20. If applicable, please describe why this proposal cannot be funded through: i) A commercial loan (providing the rejection reasons given by commercial funders), or, ii) Through your own reserves. (Maximum 200 words) The SEIF will not fund proposals that are able to access commercial finance for the full cost of the proposal. We would expect that you have first approached and been turned down by your bank for all or part of your investment proposal. The SEIF can fund the portion for which you are unable to access commercial finance and will prioritise applications for co-funding, including from a commercial lender. 21. Please list any commercial funders (e.g. banks) that you approached regarding this proposal, whether they have offered funding and any cases where a decision is still pending. Where you have sought commercial funding for your proposal please provide details. Please list names of the funders, finance requested and responses received. Please state if the decision is still pending and the date of the expected decision. Please note we will not issue a formal offer until we have received confirmation that all of the necessary funding is secured. State aid As part of the eligibility process you have considered the State Aid implications of seeking the SEIF investment and are satisfied that, if successful, the application would be compliant with State Aid rules relevant for your organisation. We need to check what de minimis aid has been given over the relevant 3 year period to ensure you are working within the regulation. Please provide the additional information requested below to enable us to confirm this position: 22

23 22. Are any of the services you provide considered statutory? Statutory services are ones which the state is legally required to provide and has contracted out to your organisation to deliver on its behalf. Examples of statutory services include but are not limited to: schooling for under 16s; health and social care for wards of the state; statutory services for offenders during imprisonment. 23. If yes, what percentage of your income will be derived from statutory services? 24. Please list all of the grants (not part of a contract or service level agreement) you have been offered (and have accepted) from a public body which are non-exempt aid in the three years preceding the date of this application. Please see our guidance on State Aid available to download with the application pack. Any public money distributed by The Social Investment Business is subject to the guidelines and limitations surrounding State Aid. These questions allow us to carry out an initial assessment of the likelihood that a grant would contravene State Aid rules. It is your responsibility to understand your State Aid position when submitting this application and signing any subsequent State Aid declaration. If you are unsure on whether any previous funding you have received resulted in State Aid then you should refer back to the funder for clarification and / or seek professional advice before submitting your application. If your application is successful and we make and offer of funding to you, we will ask you to sign a State Aid declaration (if applicable). Finances 25. Please complete the summary table below to show your organisation s recent financial track record. The SEIF will only fund organisations that are solvent and in a position to continue to successfully deliver services over the longer term. It is therefore essential that we assess your organisation s financial position, both in terms of income and expenditure and the balance sheet position. To be successful in your application you should demonstrate your solvency as well as your capacity to generate surpluses. The headline figures should be drawn straight from your audited financial statements. Management figures for income/expenditure and surplus/deficit should be provided for the current financial year. These should be the latest figures available signed off by the Board. 23

24 26. Describe how your organisation currently generates its income, including details of main sources and the security of these sources. You should be working towards a diversified and secure income base and be able to demonstrate a sound financial base. The demand for your services from purchasers / commissioners is a crucial element of this and you should be able to provide evidence of contracts and or commitments to purchase. Your application should outline how an investment would help increase the sustainability of your organisation. Please ensure that the information provided in this section relates clearly to the three year income and expenditure and cash flow statement downloaded along with the application form. The projections that you provide should be for your whole organisation, not just for the proposal you are seeking funding for, but should clearly show income and expenditure specifically related to the proposal on separate lines. Please provide details of backing assumptions for the financial projections relating these back to historical figures and expected growth. Please see the guidance provided on completing the income and expenditure and cashflow template in Section 4 of this guidance for further information. The templates are available to download at What sensitivity analysis has been performed on the income and expenditure forecast in your cashflow forecast? What are the key risks to achieving these forecasts and what mitigants are in place to address these risks? (max. 400 words) We need to know that you have properly tested your own forecasts and considered the impact that possible decreases in income or increases in expenditure would have on the proposal. What proportion of your income is secured? What proportion of your costs is fixed and what are variable and could therefore be cut if income is not in line with projections? What are the key risks to your attaining your projections, given your knowledge of the market, and what can you do to address these? Project plans 28. Please provide a breakdown of spend to be covered by the investment requested in your application. 24

25 The expenditure breakdown should provide a reasonable level of detail, covering the principal items / areas of expenditure and should not exceed the 10 rows provided in the table. Please ensure that Anticipated date of spend is achievable. 29. Please give details of how these costs were calculated (i.e. quotes, research, quantity surveyor costings)? (max. 200 words) It is important that the funding requested is the correct amount to cover expected costs. As a result we require details of how these costs were calculated so that we can assess whether they are realistic figures. Please ensure you outline who was responsible for preparing these costings and on what basis. 30. Please describe the planning you have undertaken for this project. (max. 200 words) For significant expenditure you must be able to outline the steps you have taken to develop your submitted proposal. Please explain what were the options considered and the potential hurdles to the project and plans to ensure these are not a problem. For capital developments or building works 31. With reference to capital developments, please confirm that either: (drop down box) i) Planning consent is in place ii) Planning application already made iii) Planning consent needed, application not yet made iv) Planning consent not required The SEIF programme has a compact operational timescale. HM Treasury rules are clear that the SEIF funding must be allocated and spent by 31 March Therefore any applications for capital developments must have taken the necessary steps to secure planning consent in good time to commit expenditure in advance of the end of March. This is the latest date that will allow sufficient time for the planned expenditure. 32. Will the capital development be subject to building regulations? 25

26 For property or land purchases 33. Have you identified a property and plan to exchange contracts and complete before 31 March 2013? The SEIF programme has a compact operational timescale. HM Treasury rules are clear that the SEIF funding must be allocated and spent by 31 March All organisations requesting funding for property purchases must therefore plan to complete the purchase by 31 March The SEIF funding will not be approved for completion dates beyond 31 March Please describe the options you have considered for this purchase and details of any professional advice you have taken. You must be able to outline the steps you have taken to ensure the purchase is the right option for your organisation. 35. Have you had a surveyors report or valuation undertaken within the last 12 months? (tick box) You must provide an up to date surveyor s or valuation report before any SEIF funding may be drawn down for a property purchase or refurbishment. 36. Please describe how you will manage the project and the skills and experience of the people involved. (max 200 words) The successful completion of capital projects, particularly property projects, requires project management skills and experience and you should ensure that your proposal reflects this. It is important to demonstrate that your organisation has planned to ensure you have the necessary skills and capacity to complete the project on time and on budget. Please ensure you detail how you would fund the cost of any overruns Equality Act 37. Please illustrate how your application is consistent with the principles of the 2010 Equality Act (max 200 words). Please refer to the Home Office site for more information 26

27 Previous / Other Applications 38. to 41. Whether you have previously applied to The Social Investment Business for funding will not in itself influence our decision. However, this information allows us to deal with your application in the most efficient manner and use any existing knowledge we may have about you as an organisation. Please provide the URN (unique reference number) of any previous applications to The Social Investment Business; and also let us know if you have previously received SEIF funding as a Right to Request, Social Care or Other Spin-Out applicant. If you are a public sector post spin-out we will refer your application to Local Partnerships 42. & 43. We may propose that you contact the Mutual Support Programme if it is more appropriate to your proposal Declaration Please read this declaration carefully before submitting your application and ensure that you are happy to agree to it as a representative of your organisation. Supporting Documents The following supporting documents are mandatory and must be submitted on the same day as your application form. A failure to do this means that your application will not be considered Completed cashflow template The SEIF aims to help emerging and existing social enterprises in the health and social care sector become sustainable in longer term. A three year cashflow forecast is essential for us to assess whether the organisation and proposals will generate sufficient cash going forward to meet the demands of normal business and /or planned growth. This will also help us to understand the timing around when funding for the proposal is required. Please complete the cashflow template and accompanying narrative for the whole organisation and provide a breakdown of income and expenditure. More detailed guidance can be found in Section 4 below. 27

28 Completed Profit and loss forecast The SEIF aims to help emerging and existing social enterprises in the health and social care sector become sustainable in the longer term. A three year income and expenditure forecast is essential for us to assess whether the organisation and proposals will generate surpluses from sustainable sources in the long term. Please complete the income and expenditure template and accompanying narrative for the whole organisation and provide a breakdown of income and expenditure. More detailed guidance can be found in Section 4 below. Latest three years audited accounts and latest management accounts Please submit copies of your audited accounts for the last three years. If you have been operating for less than three years then please provide any audited accounts that you have for the period for which you have been operating. Please also submit the latest management figures for the current financial year. These should be the latest figures available signed off by the Board. Section 3 - Social Impact Social impact is the positive social or environmental change achieved by an organisation; the extent to which the organisation s activities penetrate the lives and environments of its beneficiaries and the benefits (direct and indirect) that follow as result of its activities and / or service delivery. We want to know the extent to which the impact of your proposal will transform the lives of your beneficiaries. In our assessment we will want to consider what changes are being achieved for beneficiaries; how widely these changes are being made available; the extent to which beneficiaries are themselves integrated in the process of change, and empowered thereby to access a more complete and fulfilling life. We want to understand how and when these outcomes might realistically be achieved and whether they are short term benefits or lifetime / enduring changes It is important that you are able to clearly identify who your beneficiaries are; their needs, how your proposals will seek to address these needs and the social impact derived from this. 28