Borrowers

FAQs for borrowers

Some frequently asked questions and answers about borrowing from SEFA

Does SEFA provide grants?

No, SEFA will only provide funding in the form of loans. One of the main objectives of SEFA is to encourage sustainable growth by lending to social enterprises to encourage their financial autonomy.

Who can apply?

SEFA supports Australian organizations that contribute to positive social and environmental impact. Our clients are social enterprises or community businesses that create tangible social or environmental outputs. Our clients are driven by economic, social, cultural or environmental goals that are consistent with public or community benefits. They derive a substantial portion of their income from selling goods or providing a service, and have a demonstrable source of income.

Does SEFA only lend to not-for-profit organisations?

We provide loans to not-for-profit and commercial organisations for the purpose of developing a social enterprise. We want to see that the organisation is developing trading activity, and that the majority of profits are being used to meet the social or community objectives.

Will SEFA lend to an industry association or member organisation?

SEFA will consider a lending to a consortium or other recognised entity if the aim is to meet a social enterprise objective, if a long-term business strategy can be demonstrated, and if there is a viable income stream.

How much does SEFA lend?

SEFA offers loans between $50,000 and $1million plus.

What are the interest rates?

The interest rate varies depending on the amount of risk associated with the loan, the type of security used, and the amount of the loan. They are tailored according to our clients’ individual circumstances.

What does the loan have to be used for?

The loan can be used for working capital, equipment or machinery, buying a property, a renovation, refinancing a business, buying a franchise or funding a specific project. The finance needs to contribute to positive social and environmental impact.

Does SEFA require security?

In general all loans should be secured, however the requirement can depend on the size of the loan and the associated risks as to whether security is needed. The security can be against property, assets owned, or contracts with reliable customers. In some cases, we can consider other types of security such as guarantee communities (a group of people who agree to guarantee a certain amount of your loan) or you may have one or more larger guarantors.

What is the loan criterion?

SEFA does not measure loan applications solely against fixed or traditional banking criteria. Instead we work with your organisation to understand the business and its financial ability to support social and community outcomes. We typically look for three key things: 1) a clear mandate and objectives in community development, enhancing the environment and/or indigenous enterprise; 2) a viable business to create economic value that identifies sources of income and business activity, and that uses standard management tools to demonstrate a viable working enterprise and the ability to service a loan; and 3) a commitment that a proportion of surpluses generated will be applied to social objectives.

What documentation does SEFA require?

SEFA requirements are outlined in our loan application form. It includes a business plan that explains your project and how you expect to achieve viability.

How can we apply?

You can apply for a SEFA loan by filling in the Online Enquiry Form, ringing us on (02) 8199 3360 or emailing info@sefa.com.au.

Is there an application fee?

There is no application fee however we do charge establishment fee when the loan is taken up to cover the initial administration of the loan.

How long does the application process take?

It takes between two to four weeks to assess loan applications. Complex applications may take longer.

How will we know if my application has been successful?

We will keep you informed throughout the assessment process so you know how your application is progressing. If your application is approved, we will send a written offer that clearly shows all terms and conditions of the loan. If you application is not successful we will let you know.