While not all successful SIB projects have involved social finance intermediaries (SFIs), it is common to hire them to increase your chances of a successful project. Their roles in developing a SIB can include raising capital, structuring the deal and brokering the relationships between partners.
It’s not just networking and deal structure that an intermediary can help with. Many providers new to contract management have found it helpful to harness the objectivity of their intermediary even after the deals are done.
Constructive challenge:
“It can be really hard to challenge a partner in an objective way without it being seen as an affront. Having a neutral party helped keep tempers down!”
– SIB Provider
There have often been central government grants available to finance the cost of engaging an intermediary during the development, transaction and delivery phases of a SIB. Some intermediaries charge a success fee if the SIB achieves its outcomes.
Service providers’ views on getting the most out of working with an SFI:
‘Working with the right SFI is crucial. We changed SFIs during the course of developing the bid and our second choice was far more effective.’
‘Intermediaries know best, have the most technical knowledge and more engineering expertise. However, this sometimes puts providers on the back foot. Build up your confidence to find a unique solution, to push back, to design something bespoke.”
“The Intermediary was far and away an absolute necessity – they were able to facilitate interviews with several social investors to pitch to and were brilliant at keeping us on task and understanding the management reporting information.”
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