The social enterprise sector in Australia is growing strongly, but most social enterprises struggle to make it from an initial launch, no matter how promising, to gaining access to the capital they need to scale their operations and impact.
A gap exists in the social enterprise funding ecosystem between the most innovative social entrepreneurs on the one side and investors interested in funding them on the other.
StartSomeGood exists to help get more social enterprises across this gap so we’re thrilled to announce a world-first collaboration with one such investor, the Social Enterprise Finance Australia ( SEFA) to use crowdfunding to help you quality for a loan to fuel your growth.
Traditionally to get a loan an enterprise would need significant collateral in the form of a property asset or guaranteed contracts. Through SEFA:Crowdmatch qualifying enterprises will have the chance to demonstrate market traction by raising at least $50,000 on StartSomeGood. SEFA will then match that amount (or over-match, up to $1 million) with a loan.
We’re really excited about this because it’s never been done before and we think it could create an incredible pathway to growth for some exciting Australian social enterprises by connecting two very difference sources of funding.
Lending and crowdfunding usually sit on opposite ends of the funding spectrum; but when combined, the risk for both the lender as well as individual donors are reduced. The end result is more funds available to invest in growth and greater impact.
‘It’s a unique chance for Australian social enterprises to raise the capital they need to grow. We hope to stimulate them to convert their dreams into reality’, says Ben Gales SEFA’s CEO. ‘It’s an opportunity to create tangible social impact with financial support, industry expertise and experience behind them’ he says.
How does it work?
To apply, social enterprises need to complete an online Expression of Interest. If selected, they then need to describe their progress, financials and plans for growth.
If successful, you will then be invited to launch a crowdfunding campaign on StartSomeGood to raise at least $50,000. Once this amount has been reached, SEFA will then match a loan to the equivalent amount or more, up to $1 million.
Rather than measuring the loan application solely against fixed or traditional banking criteria, SEFA uses its expertise and flexibility to understand each organisation’s particular situation. Applications are assessed on the widest merits in a supportive consultative approach, and applicants are kept informed at every stage.
If you decide this is for you, good luck! We can’t wait to work with the successful enterprises to launch some world-shaking crowdfunding campaigns in the near future.