This document discusses how Social Enterprise Finance Australia (SEFA) provides loans to community organizations to help them achieve their social missions. SEFA lends responsibly based on the "5 C's": the character and governance of the organization, its capacity to repay loans through cash flow, the market conditions it operates in and its position, the capital and resilience of the organization, and any collateral it can provide. The document provides a case study of SEFA loaning funds to Myrtle Park Retirement Centre to build new housing units, which was a win-win for both organizations by providing affordable housing in a remote community.

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