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Durham University

Policy, Professions and Communities Research Group


Publication details for Professor Tony Chapman

Chapman, Tony (2015). An assessment of the willingness of organisations to borrow money in the Third Sector: findings from studies in Yorkshire, North East England and Cumbria. Newcastle upon Tyne, Northern Rock.

Author(s) from Durham


There has been much speculation over the last few years about the level of demand for
loans in the third sector. This paper aims to estimate the level of demand for different types
of loans by third sector organisations (TSOs) in Cumbria. Furthermore, the paper will
present new findings on the characteristics of those TSOs which are most likely to borrow
money, how much, from whom and for what purposes by drawing upon date from a wider
range of organisations in North East England and Yorkshire and Humber.
Research on the level of demand for loans generally has been undertaken at a national
level. Most studies have been quite small, considering the attitudes and practices of just a
few hundred TSOs. Often such studies draw upon ‘self selected’ samples of organisations
which are more likely to respond positively because they are conducive to the idea of
borrowing money.1
Consequently, until now, little reliable data has become available on: the attitudes of the
third sector as a whole towards borrowing; on the proportion of organisations which are in a
position to borrow; and, reasonably reliable estimates on the number of organisations which
may become more interested in taking loans in the future.
Furthermore, existing research tends to have been undertaken by, or on behalf of,
organisations which are driven by an eagerness to demonstrate that there is a large
marketplace for borrowing in the third sector. Consequently, projections (often based on
flawed data and over-ambitious multipliers) on levels of interest in borrowing money by
TSOs may have been exaggerated to some extent.