There was a growing interest in social investment and the provision of loan finance to social enterprises. While there has been much discussion on the supply of finance, research on the demand has been lacking. This paper shows that 15 per cent of social enterprises are seeking loan finance, with most of these borrowing from high street banks. Only one in five borrowers or 3.6 per cent of all social enterprises are approaching social investors (those lenders that have a social mission), Social enterprises without assets that they can use as collateral are shown to be able to seek finance. Just under 60 per cent of borrowers have unsecured finance with commercial banks providing unsecured lending to just under half of their customers. Social enterprises appear to be more successful than other types of small business in getting finance, and those more reliant on grants are more likely to succeed in getting finance, as are those with the public sector contracts as their main source of income. This research allowed a clear distinction to be made between social enterprises that were not interested in loan finance, those already receiving, and those that were interested but not able to source loans, or were discouraged. Conclusions were drawn for how best to support these gaps in provision without displacing existing finance.
