The Council may act as a loan guarantor for community organisations, groups or bodies where it will provide social benefits to the community of the Whakatane District and where it will help to facilitate financial independence by that group or organisation.
Who Can Apply
The organisation, group or body applying for the guarantee must be domiciled in the Whakatane District area and be providing a social benefit to the community.
How and When to Apply
Applications must be made in writing and are accepted throughout the year – there is no set application period.
The application letter must:
· Outline the purpose of the loan.
· Outline the benefits of the project to the community.
The application letter must be accompanied by:
· A copy of the latest annual financial statements and the year-to-date financial figures.*
· A financial forecast statement to demonstrate ability to meet commitments.*
* As a condition of providing a loan guarantee the Council may require audited financial statements. Should these be required the associated costs will fall to the applying organisation.
Additional information and meetings with the applicant may be requested.
How Your Application is Assessed
Applications will be considered by the council against the eligibility criteria following financial risk assessment by council’s finance staff.
Loan guarantees will only be provided:
- For funding of capital projects (e.g. Building improvements), and not for the provision of working capital cash.
- For table loans (specified loan amount, term and repayment amount with principal reducing), and not for debt of a variable amount such as overdrafts or revolving credit facilities, nor for finance or operating leases.
- Where the Council is satisfied that the organisation is financially sound, can demonstrate that it is able to meet all of its commitments and that the organisation provide an acceptable plan for the reduction of the debt.
- When the Council has received confirmation of an approved bank loan application.
- Where a suitable level of collateral has been secured through a guarantee against the fixed assets of the applying organisation (any associated costs will fall to the applying organisation).
It is expected that the applying organisation will have assessed other options available to meet costs before lodging its application with the council.
Accountability
As a condition of the guarantee, the applicant’s annual financial statements are to be promptly given to Council.
Should the guarantee be called upon, the council will take immediate steps to recover costs from the applicant including possible acquisition of assets.
Find Out More
For further information on Loan Guarantor Scheme contact Customer Services on 07 306 0500.