New mortgage initiative supports community shops

A new finance programme will support fledgling community groups while providing mortgages to community shops that would otherwise struggle to obtain help

A new initiative will make it easier for rural community groups to get mortgages to open local shops, as well as enable them to support other community shop start-ups.

The initiative is borne of a partnership between the Ecology Building Society and the Plunkett Foundation, which supports community enterprise around the world.

Anna Laycock, spokesperson for Ecology, said the partnership would help support and grow the community shop movement in a number of ways.

“Through this partnership, the interest rate ceiling for community shop mortgages is lower than our general lending for community gain, which reflects the confidence that working with Plunkett members and Plunkett-advised shops brings us.

“The package is available to new and emerging community shops, whereas, in general, our commercial mortgages aren’t available for new businesses as we usually ask for the last three years’ business accounts,” she told Positive News.

Mortgages of up to £750,000 are available.

Laycock said that while about 400 commercial village shops close each year, 140 new community shops have opened in the last five years. She added that the building society started receiving queries before the partnership was announced because community shops find arranging finance a “major challenge.”

Laycock said that Ecology was keen to continue developing expertise in this area as part of its aim to support the social economy, and added that 25% of the lending fee for new community shop mortgages through this partnership would go back to Plunkett. “That’s enough to provide initial support for at least five fledgling community enterprises,” she said.