We know that social enterprises particularly struggle to access finance, right? That social enterprises are more fragile and grow more slowly than ‘normal’ commercial businesses. We know from experience that social enterprises are relatively misunderstood by mainstream business support providers. And everyone knows that there are no tax breaks for investment in social enterprise.


Let’s see what the evidence says:

1. A Government sponsored report (from 2004) suggested that “many social enterprises could be as capable of accessing commercial finance as mainstream businesses... little evidence that social enterprises are either riskier or less well understood ... no significant difference between social enterprises and mainstream businesses in the number that had been rejected.” In other words, banks turn down lots of people and social enterprises shouldn’t think they’re so special. But that’s loans. The problem is equity – social enterprises can’t issue shares, right? Well, Social Enterprise UK say 4% of social enterprises sought to issue equity whereas the Government report that “less than 3%” of SMEs seek equity finance.

2. SEUK say that “social enterprises are more than twice as likely to report growth as SMEs - 58% of social enterprises grew last year compared to 28% of SMEs” and “18% having had to make redundancies in the last 12 months… compares with 21% of SMEs”. 

3. Government backed research in 2008 reported that “88% of social enterprises are satisfied with Business Link” and data did “not appear to support the perception that social enterprises are less satisfied with Business Link than other businesses. …  a marginally higher proportion of social enterprises (58%) reported that they were very satisfied with the service that they received than other businesses (55%)."

4. As the Government says “A number of tax-related initiatives relevant to social investment already exist.” Of course, this doesn’t mean they can't be improved or that they are fair, simple and effective. But they do exist. EIS is available to people who invest in community share schemes and the Scottish Social Enterprise Coalition says it “could be used by social enterprises to encourage third party investment”. Gift Aid increases the value of donations to charities and according to SEUK “37% of those surveyed in the Social Enterprise Survey 2009 were registered Charities” which “offers obvious tax and rate relief advantages”. HMRC describes CITR as “targeted at… enterprises in or serving disadvantaged communities”.

So it seems that actually social enterprises don’t particularly struggle to access finance, are more robust and grow faster than other businesses, are relatively satisfied with business support, and can benefit from tax breaks on investments. Oh.

Of course some of this evidence may be patchy, old or lack really convincing numbers behind it. But what evidence there is does seem to suggest the conventional wisdom is complete and utter drivel.