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Ben Gales

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  • 1. Financing Community Organisations Ben Gales, August 2013 INNOVATIVE PARTNERSHIPS
  • 2. 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
  • 3. 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.
  • 4. 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.
  • 5. 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
  • 6. The 5 C’s of Financing Community Organisations Community Organisation Responsible lending - an “appropriate” risk for the community organisation and SEFA
  • 7. Character Community Organisation 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?
  • 8. Capacity Community Organisation Capacity • How strong is your business model? • Will the cashflow you generate enable you to (comfortably) repay the debt? • Is your income diversified?
  • 9. Conditions Community Organisation 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?
  • 10. Capital Community Organisation 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.
  • 11. Collateral Community Organisation 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
  • 12. 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.
  • 13. 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
  • 14. CASESTUDY Myrtle Park / SEFA = WIN/WIN Result
  • 15. CONTACTUS • Social Enterprise Finance Australia – Ben Gales - 02 8199 3362 / 0449 258 971 – Ben.gales@sefa.com.au • Website - www.sefa.com.au