Buying an asset
Charities and social enterprises can improve their long-term financial stability by buying an asset. We have some questions to help you start thinking about an asset.
Think about sustainability
An asset is anything your organisation owns that is worth something: usually a building or some equipment that’s vitally important in enabling you to do business – such as a bus for a community transport enterprise.
For many organisations, the cost of renting their premises is their second biggest cost after staff salaries. Buying the building where you’re based can be a good way to get some long-term benefit from money otherwise used for rent. You can also potentially rent out space to others, and benefit from any increase in value. However, think about the costs of maintaining and refurbishing the asset in the long-term.
Before you start
- Does someone in your organisation have experience managing buildings or large refurbishment projects?
- Do you have a business model that will ensure that the asset will add value to the enterprise and create a revenue stream ensure its sustainability?
What do you need the money for?
- Buy the land or building
- Refurbishment costs
- Purchase of equipment to make the asset fit for purpose
- Managing an asset transfer: Organisations like Locality provide a comprehensive advice and support service for VCSEs looking to embark on an asset transfer.
- Your organisation: Cash from reserves could fully or partly fund an asset purchase.
- Community shares: If you are taking on an asset of community value, you could raise between £200,000 and £2 million by offering shares to the local community.
- Social banks: Similar to commercial mortgages from a high street bank but have an understanding of your business model and desire to create social value. Usually between £25,000 and £15 million.
- Specialist social finance providers: Can offer all of the money required and often are more likely to lend you money than a high street bank. £200,000 to £1 million usually invested.
Get the guide
Get our simple social investment guide to find out more about taking on an asset.