The co-operative could invest in other existing or new CCLH schemes. Several new CCLH schemes are seeking loans from investors to enable them to make their schemes viable.
Before deciding to invest
The co-op would need to:
- Satisfy itself that it is legally allowed to lend to a proposed CCLH scheme. The co-op’s rules will say what type of investments the co-op may make. It is probable that most co-operative housing rules would permit investment in another co-operative housing scheme, which would include all CCLH schemes unless they are predominantly about something other than housing.
- Make a judgement on the value of such an investment. Co-ops could choose to invest because the CCLH scheme is offering interest rates on loans at higher rates than those available from banks. The co-op may also invest in another CCLH scheme for ethical reasons to do with supporting another co-operative venture to increase housing supply.
- Make a judgement on the security of such an investment. Co-ops would need to be satisfied that the proposed CCLH scheme has a viable business plan and people who have the ability to deliver it.