Tender Fund

The Tender Fund is a new Futurebuilders programme offering interest-free three year loans of between £3,000 and £50,000 to third sector organisations who need relatively small sums of money to help them tender successfully for specific public service delivery contracts.

Why Futurebuilders has introduced a Tender Fund

We set up the Fund in response to feedback from third sector providers and public sector commissioners, who confirmed that there is a real need for resources to help the third sector compete for public sector contracts on an equal footing with providers from other sectors.

How to apply

There is no application form for this fund. If you want to enquire about a Tender Fund investment you can call our enquiry line on 0191 261 5200 or send an email to [email protected].

What we need from you

We will assess your application mainly by phone, although we may arrange to come and meet you if necessary.

In all cases, we will ask you to:

  • be available to discuss the application on the phone
  • provide historic financial information quickly (annual accounts and up to date management accounts)
  • provide a breakdown of the costs an investment is needed to cover
  • provide contact details for your potential purchaser, if appropriate

During the phone conversation we will ask you to:

  • explain how your organisation is constituted and confirm that it is willing and able to take on a loan
  • explain the details of the contract you plan to bid for, and your reasons for believing you have a strong chance of winning the tender 
  • explain why you need investment and what costs you need an investment to cover
  • explain how you plan to repay the loan

Eligibility criteria

  • you must be a third sector organisation
  • you must be preparing to tender for a specific public service contract
  • you must be unable to secure a loan for this purpose from a commercial lender
  • the investment must be viable (you must be reasonably likely to win the tender and likely to be able to repay a loan)
  • the ultimate beneficiaries of your project must live in England

Questions and answers

What do you mean by ‘public sector contracts’?

For the purpose of the Tender Fund, a ‘public sector contract’ is any contract directly held with a statutory body, such as local authorities, PCT’s or quangos that receive their funding from the state (this doesn’t include Lottery funding), including Europe.

Benefits paid to individuals from a statutory body for a specific purpose (eg housing benefit, working family tax credit and disability living allowance) are not considered ‘contracts’ when determining eligibility for the Tender Fund, but we do regard this as statutory income when determining eligibility for our primary fund.

A contract that you are bidding for can include a re-negotiation/re-tender of an existing contract that you hold.

What sort of organisations will benefit from the Tender Fund?

The Fund is designed to help any third sector organisation – big or small – that stands a good chance of winning a specific public service delivery contract, but needs some money to help it tender successfully.

Why is it a loan fund?

Tendering is part of the development of your business, and the cost should be part of your normal cashflow projections. This fund is intended to underwrite the cashflow implications associated with tendering, rather than to meet the actual cost for you.

This fund is designed to help organisations who are keen, determined and prepared to borrow money to help them achieve their goals. However, we are aware of the risk involved in taking on a loan for this purpose, which is why we have made the loan interest-free for the first three years.

What can we use Tender Fund loans for?

You can use the loan to meet any cost that you identify as an important part of putting together a good tender. We do not have a prescribed list of items you could spend the money on, but we think some of the items applicants are likely to use the money for will include:

  • legal costs
  • advice from procurement specialists
  • financial expertise
  • bidding staff costs or backfill

We also expect you to have a particular contract in mind when you apply to us – the Tender Fund is not intended to increase tendering skills in general, but to help third sector organisations win specific contracts.

How soon would we have to repay the loan?

Our Tendering Fund loans are interest-free for three years. You can choose whether to pay on a regular basis over the three years, or via a single payment on winning the contract. If for some reason you have not been able to repay fully within the three years, we will sit down with you and negotiate a repayment arrangement, with interest, that helps you to pay off the balance and also fits your organisation’s particular circumstances.

Do we still have to repay the loan if our tender is unsuccessful?

Yes. This is a loan fund and we expect repayment on any loans we offer. We will work with you when we assess your Tender Fund application, to make sure that you can afford the loan we offer you and would be able to repay it even if your contract bid is unsuccessful.

How will you choose between applicants?

There is a limited pot of £1 million for this Fund. The money will be allocated on a first come, first served basis. However, if demand greatly exceeds supply, we will consider several factors including:

  • how tight the timescale for the tender process is; and
  • how well you have developed your relationship with the potential purchaser.

The Tender Fund is not really designed to help third sector organisations start thinking about contracting, but to provide financial support to organisations that are already in a good position to win contracts.