News / Trust helps groups bridge funding gap
Bressay residents will soon see work start on the island’s first ever sports pitch thanks to a new £500,000 bridging loan scheme agreed by
Shetland Charitable Trust yesterday (Thursday).
Bressay Sports Club is one of two local community groups which hope to be the first to access the new scheme, set up to help organisations that have received funding from the government’s Scottish Rural Development Programme (SRDP).
SRDP funding is only released once the work has been done and paid for. However most community groups do not have the cash to pay contractors up front, and therefore have to borrow money from banks at enormous cost to themselves.
Now the charitable trust is offering to lend money to help bridge this funding gap, saving community groups large sums in interest payments.
The trust has set aside £500,000 for groups to borrow over a period of up to six months at no cost.
The scheme won general support from trustees yesterday, with trustees
Jonathan Wills and John Scott finding no backers for their motion that a minimal interest of 0.25 per cent above the current base rate of 0.5 per cent should be charged.
Mr Scott then asked what the cost in lost profit was as the £500,000 had to come out of the trust’s investment portfolio.
He was told that the cost in lost interest was just £312 a month as the funds needed to be held in a short term deposit.
Mr Scott asked for a report in a year’s time to establish the overall cost
of the pilot scheme.
Bressay Sports Club has been working towards having a sports pitch for the island for the past 10 years. Now they have been offered £127,000 from SRDP towards the £300,000 cost of improving rough ground at Fullaburn.
The rest of the funding has come from Shetland Islands Council and the
government’s Cashback for Communities scheme, as well as local fund raising.
Bressay Sports Club chairman Kenny Groat said: “We found out that SRDP wouldn’t give us any money until they had the receipts in their hand, so we would have had to go to a bank and that would have cost us a lot of money.
“This bridging loan from the charitable trust will enable us to get on with
the project without incurring any extra cost.”
Ollaberry Public Hall has also been offered funding from SRDP, while public halls in Sandness, Fair Isle and North Unst, as well as Burravoe and District Development Group have submitted applications ranging from £137,806 to £208,771.
Trust chairman Bill Manson said: “Shetland Charitable Trust has many years experience providing bridging finance to crofters and common grazings committees.
“We are delighted to be able to use Shetland’s community funds to help community groups with their cash flow to make sure they can achieve their aspirations at minimum extra cost to them and to the trust. That’s the sort of thing this money is for.”
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