A £215m government-backed investment fund is to open its doors to not-for-profit organisations working in sport and health and leisure.

Offering investment packages of loans combined with grants and professional support, Futurebuilders England is designed to provide sustainable finance to organisations that are delivering public services or want to start contracting with public bodies such as local authorities, primary care trusts or learning and skills councils.

Over half of the fund's existing investees have never borrowed before, so each applicant receives the support necessary to ensure it has the right financial, managerial and governance structures to take on a loan and successfully compete for contracts in the public sector.

Every package is tailored to meet the individual needs of the investee but some standard terms apply.

Loans are offered at 6 per cent, often with interest-free periods or repayment holidays built it. They can be used for capital or development projects by start-ups or established organisations, which must be committed to repaying the loan through income from public sector contracts or fees.

Established in 2004, the Fund was originally only open to organisations working in crime, community cohesion, children and young people, education and learning, and health and social care.

From April 2008 it will extend its support to groups working across all areas of public service delivery, including sport, health and leisure, environmental projects, waste and recycling, legal aid and the arts.

Investments start at £50,000 and there is no upper limit - the largest package to date is £10.2m.