Loan Funding

Loan Funding

Since 2004, the Trust has made a number of loans to eligible community groups and organisations to assist in funding their projects.  These have been repaid over a period, usually up to five years. Loans are not grants and any loan advanced by BayTrust is expected to be repaid in full, within the terms and conditions agreed at the time of the loan.

Loan Philosophy

BayTrust realises that not every group will be able to undertake the responsibility of a loan or be able to generate funds to repay a loan. Granting of a loan is not a replacement for our granting programme, but a complement to it. The Trust has used a loan as a way to extend its ability to assist projects, particularly when it is not able to fund the project as a grant. The granting of a loan is also an encouragement to organisations to become more sustainable and business like in their operations.

What  projects are eligible for loan funding?

Loan funding can be applied for the following projects:

• to purchase an asset
• to create an asset for community use
• to purchase an asset that will replace an expense or cost
• to improve an asset to save costs
• working capital

Who is eligible for loan funding?

The Trust may consider applications for loan funding from:

• Not for profit or charitable groups, social businesses and formal groups which have a focus on any of the Trust’s strategic outcome areas (see the Strategic Plan).
• The Trust will require evidence of the Organisation’s power to borrow and ability to repay the loan and will consider the organisational capacity and management structure as factors in considering suitability for loan funding and/or the waiver of security.

Terms and Interest Charged

Normal loan terms are over 5 years. Loans may be offered at the Trust’s sole discretion on the following terms: Interest payable at such a rate as is agreed between the Trust and the applicant (likely to be the Official Cash Rate), interest shall be charged on a straight-line basis.  Security is required and the Trust’s first preference is a first charge by way of mortgage, but the Trust may also consider other security agreements if a mortgage is not available.

The Trust may consider personal guarantees of office holders in the borrowing organisation.

Application Process

The Loan Application Form is available here as a word document or available from the Trust office. You are advised to speak with the Community Development Advisor, Terri Eggleton, about your application and project before lodging the application. The amount of information will vary dependant on the amount of the loan being applied for but as a minimum the Trust will require:

• Cashflow projections
• Evidence your rules/constitution permits borrowing
• Annual Financial Statements
• Year to date Financial Statements (if your Annuals are over 6 months old).

Decisions on loan applications will be made on a quarterly basis to coincide with our grants process, and you are strongly advised to discuss your potential needs with our staff at least six months before you require the loan funding.