New loan fund for social enterprise to unlock more jobs for disadvantaged Australians

White Box Enterprises is determined to bridge the gap between social enterprise and social impact investors, announcing today its plans to create a new $5 million loan fund specifically for jobs-focused social enterprise.

The Sustainable Employment Loan Fund (SELF), a patient capital fund has been designed to give jobs-focused social enterprises access to low-cost finance to grow their businesses and create more jobs for disadvantaged Australians.

Loan sizes will range from $100,000 to $500,000 with a focus on lending that can enable job creation for people who face barriers to employment, while also strengthening the financial resilience of the social enterprise.

“Access to capital is one of the biggest barriers jobs-focused social enterprises face when it comes to their growth. While impact investors face the challenge of finding high impact, low risk social enterprises to invest in. It’s our aim to bridge that gap,” said Luke Terry, CEO White Box Enterprises.

Westpac Foundation, a major advocate for jobs-focused social enterprise, will provide $500,000 to support the establishment of the fund. A further $1 million in first capital loss will also be committed once White Box raises $4 million.

“Westpac Foundation has been supporting jobs-focused social enterprises for over 15 years. Like us, they recognise the social and economic contribution these businesses make, as well as the barriers they face. It’s great to have their support for this project,” said Mr Terry.

The SELF is based on successful examples of similar funds in Australia (now defunct) and overseas. White Box will work alongside other catalytical impact investors to build the pool of funding that will be available for social enterprises and entrepreneurs. The fund aims to provide finance on flexible terms at affordable rates for social enterprises whilst also paying investor returns.

“Most jobs-focused social enterprises are established in non-profit structures. Due to costs associated with the unique wrap around supports they provide, their expenses are higher than traditional business models. Combined with a lack of security and long-term trade history, and a smaller deal size, social enterprises struggle to access the right finance, at the right time and the right price.” said Mr Terry.

“Highly competitive government or philanthropic grants are often the only option for social enterprises, which limits the growth and impact of jobs-focused social enterprise in Australia.”

Westpac Foundation supports over 60 social enterprises and community partners through their programs. They have close working relationships with the organisations and are always looking for ways to extend their support beyond philanthropic funding.

“To advance jobs-focused social enterprise in Australia we need to find ways to unlock new opportunities for these businesses. We’re excited to support White Box as they explore this new funding model.” said Amy Lyden, CEO Westpac Foundation.

This will be White Box’s second attempt to create a loan fund for jobs-focused social enterprise.

“When we first launched White Box in 2019, we were very ambitious and thought we could raise $50 million. Today we’re more pragmatic, but no less bold. We need to continue to challenge current approaches and explore new ideas if we are to mainstream social enterprise,” said Mr Terry.

The SELF builds on the learnings of the Social Impact Investment Task Force and complements its ambitious $70 million proposal to partner with government and philanthropy to build an Australian version of the UK’s Access Capital fund which was showcased at the 2022 Social Enterprise World Forum in Brisbane. If successful, the Australian fund will support intermediaries to provide loans of up to $150,000 to early-stage social enterprises.

“While this work is still being developed, the SELF will build pipeline, test lending rates and practices and identify the sweet spot of lending for jobs-focused social enterprises.” said Mr Terry.

For more information on the Sustainable Employment Loan Fund, contact Mark Daniels.