Social enterprise start-ups will share in more than $30 million of seed funding after the Federal Government appointed two fund managers for its Social Enterprise Development and Investment Fund.
The Government has confirmed that Foresters Community Finance and Social Enterprise Finance Australia have been selected as fund managers for the SEDIF.
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SEDIF was established to improve access to finance and support for social enterprises, which combine an innovative business model with a social or environmental mission.
The two investment funds will have a total capitalisation of $32 million.
SEFA has received $10 million in seed funding to establish the SEFA Loan Fund, with a further $10 million being invested by individual and corporate investors.
The SEFA Loan Fund will provide finance to social enterprises on commercial terms, drawing on expertise of finance organisation Triodos.
The fund is designed to help social enterprises build their capacity to manage debt and become financially sustainable.
SEFA comprises three sub-funds including the Aboriginal Community Enterprise Fund, Community Environment Fund and the Community Development Fund.
The Community Environment Fund will help social enterprises to develop innovative responses to environmental issues in the wake of climate change.
There is also an incubator fund, which covers all three categories by providing finance and capacity-building opportunities for less established social enterprises.
SEFA will also connect social enterprises with experienced businesspeople and entrepreneurs by introducing a mentoring program to provide them with support, guidance and advice.
Meanwhile, Foresters Community Finance has been allocated $6 million in seed funding, which is being matched by the fund’s investment partner Christian Super Fund.
Foresters Community Finance will manage two funds, the first of which is the Community Finance Fund, which will provide a range of tailored financial products such as mortgage and enterprise loans.
The second is the Social Enterprise Finance Fund, which will provide similar loans to the CFF but with a focus on incubating innovative and emerging social enterprises.
Announcing the fund managers yesterday, Minister for Employment Participation Kate Ellis said Tasty Fresh Community Catering is one example of a promising social enterprise.
Based in Brisbane, Tasty Fresh Community Catering creates pathways into training and employment, particularly for carers of people with a disability.
“We want to ensure that more social enterprises… are able to access appropriate finance at the right time to achieve positive social impacts in their communities,” Ellis said in a statement.
“SEDIF offers a way for community organisations, investors and governments in Australia to work together to pool resources and skills to deliver financial returns and an even greater social impact.”