How Social Investment Tax Relief Works Infographic
The Resonance Bristol SITR Fund, launched in 2015 is the first of its kind, harnessing a new government initiative called Social Investment Tax Relief (SITR) to empower social enterprises to tackle inner city poverty while still providing a risk-adjusted return to investors. Early 2016 saw the first close of the Resonance Bristol SITR Fund which enabled the first investments to take place, and the Fund currently stands at £2.1m. On 2 February 2018, the second Resonance SITR Fund for the West Midlands was launched, as this Fund too is open for investment.
Resonance believes there is a real opportunity for funds to address the problems of inequality in our cities where deprivation and wealth live in close proximity.
Bristol is a perfect place to start as it benefits from a well organized group of social business angels who are passionate about channeling their wealth and skills into social enterprises and who we have already worked with during the pilot phase.
Social Investment Tax Relief is the key to the development of these funds. It simultaneously drives down the cost of capital (the Fund will offer loans with interest rates between 4% and 7%, unsecured) for social enterprises who need funding to scale up the impact of their projects, and reduces the risk for investors in that they receive 30% of their return up front through the tax relief. See our infographic via the link above that explains how the social investment tax relief works.