More arts organisations using loan finance
More arts organisations are taking out loans to run their operations, according to a report from Nesta.
Research by the innovation organisation suggests that the arts and cultural sector in the UK is planning to borrow to seek £309 million over the next five years., or £62m per year.
That’s more than double the figures for 2016, when £29 million in repayable finance was borrowed.
However, the Nesta report also shows that only a small minority (15%) of arts organisations used this form of finance and most of them are based in London.
Nesta, which supports the Arts Impact Fund, a £7m loan fund, backed by Bank of America Merill Lynch and Esmée Fairbairn Foundation, said it expects 54% of future demand to come from outside the capital.
More than twenty organisations outside London have received or are set to receive loans, from that fund, which is backed by Arts Council England and Calouste Gulbenkian Foundation. They include Studio Wayne MacGregor, Fuse Arts and Soho Theatre.
Many arts organisations said that they were still concerned about taking out loans, citing worries about the cost of repayments, generating the income to repay the finance received and the terms of the contract. On the other hand, most of the organisations which had taken out loans said they had a positive experience of repayable finance.
Fran Sanderson, director of arts programmes and investments at Nesta, said it had commissioned the report to get some data to support the case for raising and deploying more repayable finance in the arts sector. “We are learning all the time about how to make investments in as constructive a way as possible, including working closely with partners such as Arts Council, Esmée Fairbairn, Bank of America and other social investors we’ve worked with, such as our collaboration with Big Issue Invest and Triodos on getting Village Underground’s Hackney Arts Centre off the ground.”