REAL Farming Trust: LEAP Loans
Overview
The Loans for Enlightened Agriculture Programme (LEAP) supports small-scale agroecological food and farming enterprises with funding and business mentoring. LEAP offers a mix of loan and grant.
Businesses they support
They support all types of agroecological and community-based food and farming businesses, from micro-dairies and bakeries to ethical supermarkets and veg box schemes. They work with people who share their commitment to transforming the food system at a grassroots level. Watch their short video (2 min 37 sec) to hear from some of the farmers, food producers and retailers we’ve supported.
Funding and mentoring
Business mentoring is an important part of what they offer, alongside the finance. They can advise on governance and business planning, including financial forecasting, so that you can feel confident about making loan payments. The really key thing though is that they understand the food and farming sector, and want to see small, ethical, local enterprises succeed.
Why the need for LEAP
Well-managed, small, mixed agroecological farms are more productive per hectare than the industrial kind, more wildlife-friendly, kinder to livestock, and drive positive social change.
But most high street banks favour a ‘grow as big as you can’ business model, which is not what small-scale community-based enterprises are about.
This means that poor access to finance is a big problem for small agroecological food and farming businesses. It can lead to a dependency on grants and very often, the failure of the enterprise.
The Real Farming Trust launched LEAP to plug this gap in affordable finance.
Who do they support
They support a wide range of governance structures, including Community Interest Companies (CICs), Community Benefit Societies (CBS), cooperatives, and Companies Limited by Guarantee (CLGs).
Please note the programme cannot support sole traders, partnerships or Companies Limited by Shares (CLS), but they can work with you to consider your governance model and convert to one of the above. Please let them know what governance model you use when you register your interest, and what your plans are.
What they offer
Affordable loans
- Unsecured loans for 5 year minimum, 9 year maximum term
- Loans between £10,000 and £100,000
- Can be used for capital or revenue costs
They offer one of the lowest interest rates in the social investment marketplace, currently 5%. This is calculated on a declining balance, equal instalments basis. To help cover the costs of running the programme, they charge a one-off fee. This will be taken from your loan when drawn down. This is currently set at 2% of the loan amount.
Grants
Alongside loans, successful applicants also have access to a Social Impact Grant set at 15% of the loan amount in most instances, with different levels for early stage enterprises (less than 2 years of operation) and registered societies.
Advice and support
They offer a tailored and structured mentoring package to ensure that you are ready to take on a loan. They call this ‘investment readiness’. The structure and focus of this support will vary from one organisation to another, but could be in areas such as business planning, financial modelling, governance, social impact delivery, community finance or marketing.