Sefa Base Rate Updates
This blog post provides a rolling summary of any interest updates Sefa is sharing with our borrowers in relation to the Sefa Base Rate.
Thursday 1st December 2022
At our recent meeting on November 16th, after a careful evaluation and considering important factors such as the impact on you as our borrower, the Reserve Bank of Australia (RBA) November meeting outcome and our own cost of capital, we decided to increase the Sefa Base Rate (SBR) by 0.25% from 3.40% to 3.65%.
For context, at the November meeting of the RBA Board, it was agreed the target cash rate would be increased by a further 0.25% to 2.85%.
As you may remember, Sefa’s debt investor returns are directly linked to the RBA target cash rate, so our cost of capital immediately rises as soon as the target cash rate increases. This means it’s getting more expensive for us to borrow too.
Based on our loan agreement with you and our commitment to keep you informed, we hereby give you at least 14 days’ notice of this change to the Sefa Base Rate. The 0.25% increase in the Sefa Base Rate will take effect on your loan from 15 December 2022.
Our team will continue to monitor and evaluate the interest rate landscape monthly, as the RBA is due to meet next on 6 December 2022. As of now, it is anticipated that inflation will continue to remain high into 2023, with the RBA Governor signalling future rate increases in order to see economic conditions stabilise. Therefore, our SBR will likely increase further over the coming months.
The financial resilience of your organisation is always front of mind for us. That is why we try to minimise financial pressure on our borrowers where possible.
Please reach out to our Social Finance team as soon as possible if you are concerned that increases in interest payments will significantly impact your organisation.
Friday 28th October 2022
At last week’s meeting, after a careful evaluation and considering important factors such as the impact on you as our borrower, the Reserve Bank of Australia (RBA) October meeting outcome and our own cost of capital, we decided to increase the SBR by 0.25% from 3.15% to 3.40%.
For context, at the October meeting of the RBA Board, it was agreed the target cash rate would be increased by a further 0.25%.
As you may remember, Sefa’s debt investor returns are directly linked to the RBA target cash rate, so our cost of capital immediately rises as soon as the target cash rate increases. This means it’s getting more expensive for us to borrow too.
Based on our loan agreement with you and our commitment to keep you informed, we hereby give you at least 14 days’ notice of this change to the Sefa Base Rate. The 0.25% increase in the Sefa Base Rate will take effect on your loan from 15 November 2022.
Our team will continue to monitor and evaluate the interest rate landscape monthly, as the RBA is due to meet next on 1 November 2022. As of now, it is anticipated that inflation will continue to remain high, with the RBA Governor expecting additional increases in the target cash rate until economic conditions stabilise. Therefore, our SBR will likely increase further over the coming months.
The financial resilience of your organisation is always front of mind for us. That is why we try to minimise financial pressure on our borrowers where possible.
Please reach out to our Social Finance team as soon as possible if you are concerned that increases in interest payments will significantly impact your organisation.
Friday 30th September 2022
At last week’s meeting, after a careful evaluation and considering important factors such as the impact on you as our borrower, the Reserve Bank of Australia (RBA) September meeting outcome and our own cost of capital, we decided to increase the SBR by 0.35% from 2.80% to 3.15%.
For context, at the September meeting of the RBA Board, it was agreed the target cash rate would be increased by a further 0.50%. While all major banks continue to pass on the full RBA increases to their borrowers, Sefa is continuing to only pass on a 0.35% increase to the SBR.
As you may remember, Sefa’s debt investor returns are directly linked to the RBA target cash rate, so our cost of capital immediately rises as soon as the target cash rate increases. This means it’s getting more expensive for us to borrow too.
Based on our loan agreement with you and our commitment to keep you informed, we hereby give you at least 14 days’ notice of this change to the Sefa Base Rate. The 0.35% increase in the Sefa Base Rate will take effect on your loan from 15 October 2022.
Our team will continue to monitor and evaluate the interest rate landscape monthly, as the RBA is due to meet next on 4 October 2022. As of now, it is anticipated that inflation will continue to remain high, with the RBA Governor expecting additional increases in the target cash rate until economic conditions stabilise. Therefore, our SBR will likely increase further over the coming months.
The financial resilience of your organisation is always front of mind for us. That is why we try to minimise financial pressure on our borrowers where possible.
Please reach out to our Social Finance team as soon as possible if you are concerned that increases in interest payments will significantly impact your organisation.
Thursday 1st September 2022
We feel as ‘déjà-vu’ about these lines as you – but the economic and interest rate environment continues to evolve. By now, you’ll know that our management team meets monthly to discuss the Sefa Base Rate (SBR – the variable portion of the total interest rate payable on your loan with us) and if there are any changes, we will communicate with you. At last week’s meeting, after a careful evaluation and considering important factors such as the impact on you as our borrower, the Reserve Bank of Australia (RBA) August meeting outcome and our own cost of capital, we decided to increase the SBR by 0.35% from 2.45% to 2.80%.
For context, at the August meeting of the RBA, it was agreed that the target cash rate would be increased by a further 0.50%. While all major banks continue to pass on the full RBA increases to their borrowers, Sefa is passing on only a 0.35% increase to the SBR.
As you may remember, Sefa’s debt investor returns are directly linked to the RBA target cash rate, so our cost of capital immediately rises as soon as the target cash rate increases. This means it’s getting more expensive for us to borrow too.
Based on our loan agreement with you and our commitment to keep you informed, we hereby give you at least 14 days’ notice of this change to the Sefa Base Rate. The 0.35% increase in the Sefa Base Rate will take effect on your loan from 15 September 2022.
Our team will continue to monitor and evaluate the interest rate landscape monthly, as the RBA is due to meet next on 6 September 2022. As of now, it is anticipated that inflation will continue to remain high, with the RBA Governor expecting additional increases in the target cash rate until economic conditions stabilise. Therefore, our SBR will likely increase further over the coming months.
The financial resilience of your organisation is always front of mind for us. That is why we try to minimise financial pressure on our borrowers where possible.
Please reach out to our Social Finance team as soon as possible if you are concerned that increases in interest payments will significantly impact your organisation.
Monday 1st August 2022
Following our earlier communication with you, our management team met last week to discuss the Sefa Base Rate (SBR) which is the variable portion of the total interest rate payable on your loan with us. After a careful evaluation and considering important factors such as the impact on you as our borrower, the Reserve Bank of Australia (RBA) July meeting outcome and our own cost of capital, we decided to increase the SBR by 0.35% from 2.10% to 2.45%.
For context, at the July meeting of the RBA, it was agreed that the target cash rate would be increased by 0.50%. This follows a 0.50% cash rate increase at their previous meeting in June. While all major banks have passed on the full 0.50% July increase to their borrowers, Sefa is passing on only a 0.35% increase to the SBR.
As you may remember, Sefa’s debt investor returns are directly linked to the RBA target cash rate, so our cost of capital immediately rises as soon as the target cash rate increases. This means it’s getting more expensive for us to borrow too.
Based on our loan agreement with you and our commitment to keep you informed, we hereby give you at least 14 days’ notice of this change to the Sefa Base Rate. The 0.35% increase in the Sefa Base Rate will take effect on your loan from 15 August 2022.
Our team will continue to monitor and evaluate the interest rate landscape monthly, as the RBA is due to meet next on 2 August 2022. As of now, it is anticipated that inflation will continue to remain high , with the RBA Governor expecting additional increases in the target cash rate until economic conditions stabilise. Therefore, our SBR will likely increase further over the coming months.
The financial resilience of your organisation is always front of mind for us. That is why we try to minimise financial pressure on our borrowers where possible.
Please reach out to our Social Finance team as soon as possible if you are concerned that increases in interest payments will significantly impact your organisation.
Thursday 16th June 2022
Following our earlier communication with you, our management team met yesterday to discuss the Sefa Base Rate (SBR) which is the variable portion of the total interest rate payable on your loan with us. After a careful evaluation and considering important factors such as the impact on you, the Reserve Bank of Australia (RBA) June meeting and our own cost of capital, we decided to increase the SBR by 0.50% from 1.60% to 2.10%.
For context, at the June meeting of the Reserve Bank of Australia, it was agreed that the target cash rate would be increased by 0.50%. This follows a 0.25% RBA increase at their previous meeting. While all major banks have passed on the full 0.75% increase since May to their borrowers, Sefa is passing on only a 0.50% increase to the SBR.
Sefa’s debt investor returns are directly linked to the RBA target cash rate, so our cost of capital immediately rises as soon as the target cash rate increases. This means it’s getting more expensive for us to borrow too.
To illustrate this change in your interest rate with an example, the below table shows the estimated additional annual interest your organisation will need to pay after the Sefa Base Rate (SBR) increase, depending on your outstanding loan amount.
Based on our loan agreement with you and our commitment to keep you informed, we hereby give you more than 14 days’ notice of this change to the Sefa Base Rate. The 0.50% increase in the Sefa Base Rate will take effect on your loan from 15 July 2022.
Our team will continue to monitor and evaluate the interest rate landscape monthly, as the RBA is due to meet next on 5th July 2022. As of now, its anticipated inflation will continue to rise, with the RBA Governor expecting additional increases in the target cash rate until economic conditions stabilise. Therefore, our SBR will likely increase further over the coming months.
Your organisational wellbeing and financial health are important to us. That is why we will reduce financial pressure on our borrowers where possible.
Please get in touch early with our Social Finance team if you are concerned that increases in interest payments will significantly impact your organisation.
Thursday 19th May 2022
We wanted to let you know that although the RBA recently raised the official cash rate, your Sefa interest rate will stay the same for now.
But as the RBA has signaled further rate rises in the coming month, our Sefa interest rate could also increase – this would have direct implications for your monthly repayments, so we want to make sure you’re prepared.
What a rise in Sefa rates could mean for you
The interest rate on your loan with Sefa is made up of your Sefa Base Rate (SBR) and a fixed margin (typically stay the same through the term of your loan).
The SBR is the interest rate the Sefa management team sets and adjusts from time to time, with reference to factors such as the Reserve Bank of Australia target cash rate and general economic conditions. You can find this information in your loan documents.
Sefa can adjust the SBR at any time with 14 days written notice, as per your signed loan agreement.
The below table shows you the estimated annual increase in interest your organisation will need to pay, depending on the outstanding loan amount, if our SBR increases.
ABC Community Centre Ltd has a $500,000 facility outstanding with a 5.00% interest rate (1.60% SBR + 3.40% Margin) with an annual interest payable of $25,000. A 0.10% increase to the SBR would increase their interest rate to 5.10% and their annual repayments to $25,500. This would roughly equate to a $42 monthly increase.
NOTE: This is an example – a rate rise might impact you differently. Please seek independent advice to understand how these potential changes might affect your situation.
Next interest rate update
We have monthly internal meetings where we discuss the general credit market environment and any changes in the RBA cash rate. Our next meeting is on 15 June 2022, where we will review our interest rate – and update you on any changes.
We are here to support you. Please reach out to us if you have any questions or concerns about the above.