A Blended Fund That Helps Social Enterprises

October 3rd, 2016  |  Source: Forbes

There are a great many fledgling social enterprises that don’t qualify for regular bank loans. Maybe they need to build a new and expensive supply chain. Or their margins are relatively low. Or  they want to remain in a particular community, instead of engaging in rapid-fire expansion. Or they’re small sustainable farmers  who can’t find someone to move or process their  product.

That’s why, about four years ago,  RSF Social Finance, a nonprofit that makes loans, grants and investments in social enterprises, launched its integrated capital blended funds, two of them focused on farmers. The most recent of those two, Soil Health Capital Collaborative, a $1 million blended fund for sustainable farming ventures, was introduced about a year ago. The oldest: the four-year-old Local Food Capital Collaborative, a $6.45 million fund for farming infrastructure, like moving and processing meat raised by farmers using sustainable methods.

Now, RSF has announced its first Soil Health Capital disbursement, a $200,000 loan package to the Grass Roots Farmers’ Cooperative in Clinton, Arkansas, to finance the farmers’ purchases of feed and animals to be raised and then sold back to the co-op. There also was a $400,000 line of credit through the Local Food Capital Collaborative aimed at helping the co-op buy animals from member farmers and process them.

“As we go deeper in working with organizations with impact, we’ve realized that a standard bank-like loan is not what these enterprises need,” says Kate Danaher, senior manager, social enterprise lending and integrated capital. “This helps us work in a deeper way in all our focus areas.”

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