Say hello to Australia’s first impact-linked business loans – BOLD
Impact Investment Group has launched BOLD business loans with financial incentives for positive change.
BOLD business loans launch today from leading Australian impact investment funds manager, Impact Investment Group (IIG). These are loans with a difference aimed at making a difference. The new loans are designed with positive action in mind, rewarding businesses for policies that benefit society and the environment.
Many startups struggle to get traditional venture capital impact funding because they aren't scalable. And lengthy administration processes and strict eligibility criteria can make it just as difficult to acquire government and philanthropic grants. IIG wants to make the process easier for businesses looking to make a difference to get the funding they need to thrive. IIG CEO Daniel Madhavan called the new form of loan "a game-changer for businesses making the world a better place".
The business loans are repayable as a percentage of the borrower company's revenue, rather than a monthly lump sum. This makes it easier for companies to maintain cash flow and grow their businesses. They also have financial incentives to do good. For example, the first BOLD loan was issued to Xceptional, a company that finds tech-based employment for people on the autism spectrum – their incentive is that the more people they place in high-quality roles, the more their overall repayment is reduced.
"One of the most frequent questions I get from other purpose-driven founders is how to access capital. I'll definitely be pointing people to BOLD from now on," Mike Tozer, CEO and founder of Xceptional said.
A bright future for business
This type of finance could be just the breath of fresh air that entrepreneurs struggling to get established have been waiting for. It's also a step in the right direction towards helping businesses protect our planet. We've recently been witnessing the rise of green personal loans and home loans, but until now haven't seen much movement in the business sector. BOLD's incentive model could go great lengths to encouraging existing businesses to improve their sustainable and social ethics.
IIG's vision is "a future where energy is 100% renewable, affordable and universally accessible" and they believe that "buildings, towns and cities can be sustainable, inclusive and beautiful. Vibrant businesses can grow while respecting the earth and contributing to our society".
In addition to IIG, the loan is backed by Tripple, the Community Impact Foundation, the Disability Impact Fund and the Snow Foundation.