Ben Gales

Financing Community Organisations Ben Gales, August 2013

INNOVATIVE PARTNERSHIPS

FINANCING COMMUNITY ORGANISATIONS

• Background on SEFA

• How we can help you achieve your social mission

• Lending responsibly - the 5 C’s of Financing Community Organisations

• Case study - Myrtle Park

SEFA BACKGROUND

• SEFA is a social enterprise that lends to other social enterprises with a focus on community, indigenous and environment

• We seek to be an important contributor to the long-term development of the social enterprise market in Australia

• SEFA is one of the Australian Government’s Social Enterprise Development and Investment Funds (SEDIF)

• Investors: • NSW ALC, Triodos, Community Sector Bank, foundation, individuals

• Seeking financial and social returns.

PORTFOLIO

• SEFA has made loans to community projects in regional Australia:

– Crisis accommodation in Cairns;

– Low income retirement housing in NW Tasmania; and

– A community school in Kuranda in Queensland.

HOW SEFA HELPS YOU ACHIEVE YOUR MISSION

Social Impact

Time

Constrained growth

Unconstrained growth

• We provide loans to community organisations to enable them to better achieve their social mission

The 5 C’s of Financing Community Organisations

Community Organisation

Responsible lending - an “appropriate” risk

for the community organisation and SEFA

Character


Character

• You – the people who run the community organisation

• How well is your organisation run?

• Do you have the right financial reporting and governance in place?

• Do you have local community support?

Capacity


Capacity

• How strong is your business model?

• Will the cashflow you generate enable you to (comfortably) repay the debt?

• Is your income diversified?

Conditions


Conditions

• What is the state of the market you are operating in and how well are you positioned?

• Is there high demand / need for your product / service?

• What is the social impact that our loan will help you achieve?

Capital


Capital

• What is the “capital” in your community organisation? How resilient is your organisation?

• This can be financial – cash – but we also look at the strength of non-cash / community assets.

• Having sufficient capital means that you can weather any unexpected setbacks.

Collateral


Collateral

• SEFA lends responsibly to ensure your and our sustainability

• Security is an important factor in risk assessment

• Having a loan backed by security reduces the lenders risk

• This reduces the interest charged to you

Case Study – Myrtle Park

• Myrtle Park Retirement Centre is based at Yolla in NW Tasmania. A community organisation that provides low income retirement accommodation.

• SEFA is funding four new two-bedroom units. Prefabricated housing units that have a high environmental rating.

• Each unit costs about $120k ($40k of foundations) and rents are about 1/3rd aged pension.

• Bank loans were not available. Security is existing units and land. Organisation has been in existence for 22 years.

• A remote community that is keen to provide low income housing for retired people from district.

Case Study – Myrtle Park

Myrtle Park

Character: Significant

local community support –

volunteer members – with

the build managed by

Tasbuilt Homes – Strong

and resilient team

Capacity: Rental

income and minimal

expenses due to

community volunteers –

strong cashflow to

service debt

Conditions: Myrtle Park provide affordable

retirement accommodation in Yolla, a

disadvantaged area in North-west Tasmania –

high demand

Capital: limited cash

reserves but minimal

expenses and strong

community support –

highly resilient

Collateral: land and

buildings owned by

Myrtle Park – Good

security

CASE STUDY

Myrtle Park / SEFA = WIN/WIN Result

CONTACT US

• Social Enterprise Finance Australia

– Ben Gales - 02 8199 3362 / 0449 258 971

– [email protected]

• Website - www.sefa.com.au

mailto:[email protected]

http://www.sefa.com.au/

Business

Ben Gales