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Community Loans

Rātā Foundation makes community loans to organisations which meet our criteria.

Strip Seeding

We see the provision of community loans as a way to extend our ability to assist projects which benefit the community in the long-term as well as a positive way to recycle funds.

Community loans have been shown to be an effective way of building sustainability for community organisations.

What’s the difference between a Loan and a Grant?

A community loan is not a grant and any loan advanced by Rātā Foundation is expected to be repaid in full, within the terms and conditions agreed at the time of the loan.

Grants are administered with no expectation of repayment.

What projects are eligible for Community Loan funding?

Loan funding may be used for the following projects:

  • to purchase an asset.
  • to create an asset for community use.
  • to purchase an asset which will replace an expense or cost.
  • to improve an asset to save costs.

Loan funding will not be made to retire current debt.

What kinds of organisations are eligible for Community Loan funding?

We may consider applications for loan funding from the following:

  • Formally constituted groups serving one or more of our four funding regions.
  • Organisations which can provide clear evidence of its power to borrow and ability to repay the loan. Organisational capacity and management structure which meet our criteria will also be considered as an eligibility factor.

What is the loan term and interest rate?

Normal loan terms are for a maximum period of ten years, repayment of principal and interest will be made by monthly installments.

Community loans may be offered at our discretion on the following terms:

  • interest payable will be calculated at time of application, depending on assessment factors.
  • the maximum amount for any new loan is $500,000.
  • the fees in respect of loan documentation and securities registration will be at the applicant’s cost.
  • an assessment fee of 0.2 % of the loan amount applied for will be charged.
  • the ability to service a loan will determine the amount advanced.

What financial information do I need to provide?

We require the following information in consideration of your loan application:

  • Your financial cash-flow projections.
  • Evidence your rules/constitution permits borrowing.
  • Your annual financial statements.
  • Your year to date financial statements.
  • Budgets.
  • Sale and purchase contract or current quotations.
  • Valuations.
  • Insurance policies.
  • Confirmation of other funding and any other funding being sought.

Further Information

If you require further information or clarification you may contact our Head of Finance about your loan application and project prior to lodging your application.

When are the closing dates for a Community Loan application?

There are no set closing dates throughout the year.

Applications can be submitted at any time of the year, Trustees will consider recommendations during their regular board meetings.

If you would like more specific information about the approval process for your community loan, please contact our Head of Finance.