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Innovative loan shows a growth pathway for social enterprise

08:00am December 18 2023

A Green Collect worker processes e-waste for reuse or recycling. (Supplied)

Social enterprise Green Collect has secured a loan guaranteed by Westpac Foundation in an innovative deal that will allow the business to progress its growth plans.

Melbourne-based Green Collect, which was founded by Darren Andrews and Sally Quinn in 2005, operates a wide range of circular economy services for office buildings, while creating high-quality work and training opportunities for people who have previously faced barriers to employment.

The $250,000 loan from Westpac will support the group’s expansion to operate two new collection depots, in partnership with network operator TOMRA Cleanaway, for the Victorian government’s Container Deposit Scheme, which got underway in November. 

“It was clear that the business and job opportunities that these two sites would create would have significant impacts, so we were definitely keen to expand our operations in this area,” Andrews says in an interview. 

The sites will recycle an estimated 34 million containers a year, while creating 45 employment opportunities for Green Collect’s target cohort. 

Green Collect’s new container deposit collection depot at Campbellfield, Vic. (Supplied)

“We’ve had a very positive relationship with Westpac Foundation since 2012 and when we mentioned the opportunities these new sites presented and the need for finance to establish them, the Foundation offered this solution, which they were already looking to set up for social enterprises,” Andrews says.

Securing a loan meant Green Collect could access the capital quicker than if it sought to raise the money via philanthropy, Andrews adds. 

Meanwhile, the Foundation’s guarantee is designed to overcome potential barriers faced by social enterprises when seeking commercial loans. 

Australia’s social enterprise sector contributes over $21 billion annually to the national economy, while their value in promoting inclusion across local communities goes well beyond that. 

However, their operating costs, especially for organisations like Green Collect that promote inclusive employment, are significantly higher than traditional companies, which in turn makes it harder for them to access capital.  

Studies estimate the costs for work-integrated social enterprises are around 20 per cent higher than their for-profit peers, and Andrews says the experience at Green Collect bears that out. 

“That’s partly because the people we employ have faced significant barriers to employment through life experiences and generally require greater training and supports.” 

Westpac Foundation hopes the arrangement with Green Collect establishes a model it can further develop. 

“The loan guarantee helps social enterprises like Green Collect transition from being reliant on philanthropic funding to instead being able to access finance independently as a business,” says Amy Lyden, Westpac Foundation CEO. 

“It not only provides the necessary security and helps reduce the cost of the loan but also gives Green Collect a track record in finance repayments which may help them secure additional financial support in the future.”  

Westpac Foundation is also working with indigenous-owned social enterprise Bama on a similar type of loan deal to help finance the growth plans of the Cairns-based civil construction business. 

Green Collect and Westpac Foundation and bank staff at the opening of the Campbellfield CDS depot. (Supplied)

Green Collect has come a long way since Andrews and Quinn’s original vision more than 20 years ago to collect discarded items and find ways to put them back into use, a concept now widely referred to as the circular economy. 

The social enterprise collected 190,600 kilograms of surplus products in the 2023 financial year, creating reuse outcomes for 50 per cent, while a further 43 per cent was sorted, dismantled and separated to be recycled. These processes avoided an estimated 1,480 tons of carbon dioxide emissions that would otherwise have been required to create and distribute new products made from raw materials. 

Green Collect currently employs 80 people, half of whom come from its priority cohort of jobseekers at most disadvantage in the labour market. 

Andrews says the new container collection depots will complement and boost Green Collect’s existing businesses, helping to position the organisation for growth and expand the employment opportunities it can offer. 

Green Collect also provides office clean out and furniture collection services, and runs a number of stores selling second-hand, recycled and ethical products including furniture, clothing, electronics and IT equipment.

The circular economy is still a relatively new concept in Australia, but Andrews says that governments at all levels are becoming more proactive in looking for ways to promote it. All of Green Collect’s staff receive training in circular economy theory and skills, while awareness among the wider community is also growing. 

“A circular economy is so much more than just managing waste,” Andrews says. “It’s a change in our mindset. By understanding the lifecycle of products, from sourcing materials, design, and how we consume, we can make better choices to keep products and materials in circulation for longer.”

MORE: Westpac Wire paid a visit to Green Collect’s operations in 2019.

James Thornhill was appointed as editor of Westpac Wire in May 2022. Prior to joining the bank, he was a business and financial journalist with more than two decades of experience with international newswires. Most recently, he was a resources correspondent for Bloomberg, covering the mining and energy sectors, and previously reported on a broad range of topics from economics and politics to currency and bond markets. Originally from the UK, he’s had stints working in London, New York and Singapore, but is now happily settled in Sydney.

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