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Nothing Revolutionary Here: Impact Investment and the 5C’s of Credit

While looking to support the generation of positive social outcomes, Impact Investors like any other commercial investor, look for a return on their money and to be confident they won’t lose their initial capital. Nothing revolutionary here.

Attracting Impact Investment then requires not only your evidenced theory of change and impact measurement, but necessitates a robust, sustainable business model. Feeling confident you have all the pieces of the puzzle together in your business plan and pitch deck – fabulous! Confidence in yourself and your enterprise is essential when approaching investors but there will always be some curve balls, so before hitting the pavement, taking the time to assess yourself though potential investors eyes can help prepare you for the questions that inevitable follow a pitch, ensuring that to the best of your ability investors are hearing/seeing what you believe you are saying.

One way to do this is to check your business plan and pitch deck against the 5 classic C’s of credit. Not a plan in and of themselves, the 5 C’s are useful for reflecting on the work you have done to inform the development of your business case and strategy for growth and investment.

The Unoriginal, Tried and True 5 C’s of Credit


You and your team, especially you as the leader of your business – your strengths and weaknesses, how do you leverage and mitigate them. Who is part of your management team, your advisory/governance board, what/where are their skill sets and networks and are they fit-for-purpose? Do they lend themselves to where you are now or for your businesses growth and sustainability? Do you have a succession/hit by a bus plan?

In essence – you believe in your team for a reason, have you ensured a potential investor sees the same qualities and skills in you and in them as you do?


An ambiguous little coverall term. In this context capacity is in both human and financial terms. Building on the character of you and your team, what are the internal resources, skills and infrastructure you have developed? What are your organizational capabilities and do you have a plan for how to grow them? From the numbers side this looks like evidence of your cash flow and what partnerships you have, pipeline contracts, MOU’s etc..

Have your demonstrated that you’re as in demand as you say you are and are you set up/gearing up to manage current and future demand?  


The terms of the engagement/investment – you are asking for money to undertake activities, what are those activities as milestones, where and how are you are setting them? Have you thought about contingencies, what happens if x and y happens but Z does not? What do your scenario plans look like? We can’t know everything but demonstrating what you know you know, and what you know you don’t know if important.  

How achievable are your plans/targets and strategy, are they realistically budgeted? Have you really interrogated what could go wrong and do you have a plan in place if it does to retain capital? What have you done (that is in your power to do) to mitigate/test the risks to your enterprise as you grow?


This is the number crunch $$$ – Does your financial modeling, budget, cashflow stand up? Is it reasoned and evidenced? More specifically how does it stack up to demonstrate your total investment/funding requirements and your ability to provide the promised return/repayment? Importantly this includes how the $ are divided in your finance pie – the types and stages of investment, priority and allocation of funds.

Does your financial story tell the same one as your business plan? Are you asking for the right amount of money? Can you offer the returns promised? What is your break even timeline? Do the numbers correlate with your planned activity?


The simplest C. Do you have any security for investors if it all goes wonky (this is more relevant for debt than equity). Is there any contracted revenue, pre-sales, infrastructure assets etc.

Is there any security you can offer your investors if it does NOT go according to plan?

Are you looking to secure funding for your social enterprise? Get support to become investor-ready and a $15,000 grant from Social Enterprise Finance Australia (SEFA) and Macquarie Group Foundation. Don’t miss out. Applications close 30 June. Find out more and APPLY NOW.

Hanna Ebeling is Head of Portfolio Management at SEFA (Social Enterprise Finance Australia Ltd) where she leads a team who works closely with mission-driven organisations to understand what makes them resilient, and how to structure debt instruments to suit their needs. She is passionate about blended finance deals and innovative housing solutions.

Social Change Central
Social Change Central

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