If you’ve ever explored external finance options for your charity or social enterprise, you may have come across the term ‘social investment’. But what exactly is it, how does it work and crucially, how do you know if it’s the right option for your organisation?

In simple terms, social investment is the use of repayable finance to create social impact. It can sit alongside grants, donations, trading income or even commercial loans. However, unlike grants, social investment must be repaid (usually with interest).

Social investment can take many forms - from secured or unsecured loans to blended finance (a mix of grant and repayable finance) or even equity.

It can be used to:

• Maintain or improve cash flow

• Buy an asset

• Scale your organisation

• Kickstart a new programme or project

If you’re considering social investment, the key is to be investment-ready. In this blog, Senior Programmes & Projects Manager at Good Finance, Olivia McLoughlin explores some of the key factors to help you get there.

Understand if it’s the right option

Social investment isn’t ‘free money’, it’s a partnership based on repayment and impact. Before applying, consider how your organisation would repay any investment and whether taking on debt is the right move for you. A great place to start is Good Finance’s Is It Right For Us? Tool - a short diagnostic quiz that helps you assess whether social investment is a realistic option for your organisation.

Find the right partner

Not all social investors are the same. Each has different priorities, funding products and application criteria. Take time to research, ask questions, and find an investor who gets your organisation - someone who believes in your mission as much as you do. Think of it as building a partnership, not just securing finance. The Investor Directory on the Good Finance website is a great place to start; you can filter by region, outcome area or the amount you want to borrow, and reach out directly to investors who align with your goals.

Know your numbers

Social investors need to feel confident that their money will be used to create social impact, and won’t put your organisation under unnecessary pressure to repay. Be prepared to share key financial information such as:

• Cash flow statements

• Profit and loss reports

• Annual accounts

• Bank statements

• Details of any existing investments

Knowing your numbers not only builds investor confidence but also helps you understand your organisation’s financial health and capacity for growth.

Impact Matters

Social investment isn’t just about the financial return, investors want to see how your work is making a tangible difference to the people and communities you support. Consider what you need social investment for, be clear about your goals and how the funding will support your social mission. Unlike grants, social investment is often more flexible, it can cover things like core costs and staff salaries as long as those expenses ultimately drive your mission forward.

Being able to tell your story clearly and back it up with evidence is key. It’s not about having a glossy business plan; it’s about showing that you truly understand your users, their needs, and the outcomes you’re achieving.

Remember: there’s no story without numbers, and no numbers without a story. The Good Finance Outcomes Matrix is a great tool to help you map and communicate your impact in a simple, visual way.

Don’t be afraid to ask for help

Becoming ‘investment ready’ isn’t about having a flawless business plan, it’s about understanding your organisation inside out and being able to communicate your mission, model and impact with confidence. No one expects you to know everything. Seek out advice, connect with peers who’ve been through the process, and use the tools and resources available through Good Finance to support your journey.

Remember: social investors aren’t just investing in your organisation, they’re investing in you.

Social investment can be a powerful tool for growth, resilience and impact but it’s not a one-size-fits-all solution. By taking the time to understand your options, strengthen your financial foundations and connect with the right partners, you’ll be in the best position to make an informed, confident decision.