Using Charity Property As Collateral

Charities may consider using their property as collateral for loans but need to establish whether they can and should do this, and then consider the practical steps that need to be taken to comply with the Charities Act 1993 (as amended)

A charity must check its governing documentation to ensure that appropriate powers are granted and that there are no restrictions that would apply.

In respect of unincorporated charities the powers or restrictions may be contained in a charter, will, trust deed, scheme or a combination of these or other documents. Trustees also have statutory powers to enable them to deal properly with land in terms of management and investment, including borrowing in certain circumstances (including using permanent endowment).