Rae O’Connell | Guildhouse Interest Free Loan Service
Guildhouse, one of our successful Plus1 campaigners, recently established an interest free loan service for their members.
Microfinance is proving to be increasingly important for the arts sector, providing a crucial stop-gap to help artists and arts organisations cash-flow their creative pursuits. We spoke with Guildhouse Executive Director Rae O’Connell about the organisation’s microfinance service.
First of all, tell us a bit about how the service works?
if is a commercial interest free loan service for current financial members of Guildhouse. Supporting a creative outcome, the loan is available to practitioners and organisations working in any artform: at all career stages. Loan amounts are between $1,000 and $5,000 with a repayment term of up to 12 months.
Can you give us a snapshot of the service’s impact on your members so far?
We’re proud to announce if has already had four successful applicants. The funds have been used chiefly for professional development and marketing. This service directly impacts Guildhouse’s core mission: assisting members in building enduring and sustainable practices.
How did the idea come about and was it difficult to implement?
I was originally inspired by the same concept set up by our Auditor Brian Tucker and Cathy Hunt from Positive Solutions. They invested and set up this service years ago and it was great hearing about what they support and as the money was repaid they could loan it again.
The idea of a perpetual pool of funds for creative professionals to take up entrepreneurial opportunities was very inspiring.
Megan Rainey, Guildhouse Program Manager suggested that your Plus 1 program could be a really good opportunity to fundraise and have the funds matched to establish our own pool of funds that our members could dive into. She was right.
The fundraising was a lot of hard work. Everyone in our small office worked to make this happen. Our Board Members lobbied and our creative community and partners really got behind us.
We raised more than our target through Pozible and we had a couple of significant donations from the James and Diana Ramsay Foundation and our landlord. Having the funds matched gave us a pool of over $70,000. We just want to loan it all out now.
Can you highlight a particular case where one of these loans has triggered a significant outcome or opportunity?
Artist and illustrator Lisa King, known for her large scale mural work and recent cover illustration for Urban Walkabout used if: the Guildhouse Interest Free Loan Service to propel her practice into the international arena.
The funds enabled Lisa to purchase the equipment (powerful mac, tablet and camera) she needed to produce several exciting new assignments – building new audiences and future opportunities. New York online publisher Lost At E Minor commissioned illustrations for a Macintosh campaign, whilst Analogue Digital commissioned work and will feature Lisa as a keynote speaker at the First Coat Festival in 2016.
How many loans have you supported to date and what are the main things your members seek loans for?
if has delivered no-interest loans valued at over $15,000 to four artists in the three months since its launch. The reasons our members are seeking these loans are as diverse as our membership base. They included securing bond for a venue, purchasing new computer equipment, building a website, purchasing a Chandler & Price Letterpress and for freight.
Have there been any key insights that you have learnt from your members as a result of offering this service?
A common theme links these loans. Creative professionals often work across multiple sectors, with irregular and low-income levels. Their inability to fit the conventional mould of a successful loan candidate limits their options.
We believe if: the Guildhouse Interest Free Loan Service can level the playing field. The other benefit from this service is that the artists establish a credit rating and build a new relationship with Foresters, the lending institution that we work with who administers the loan.
Has the introduction of this service had a noticeable impact on Guildhouse’s membership base?
We have many new members joining every month so it is too early to measure, but it will certainly be monitored in our next series of member surveys.
Have there been any surprises or hidden hurdles in establishing and managing this service?
No, our finance partner Foresters Group facilitated an incredibly professional and simple process. Foresters are very successful in providing community finance loans for social enterprises and non-profit organisations who are looking to grow and develop.
What advice would you give to other arts organisations looking to offer microfinance programs?
New approaches are needed to assist creative professional to build sustainable practices. Impact investments like if generate social and cultural impacts alongside a financial return.
What advice would you give artists looking to apply for one of your loans?
Back yourselves and your practices! Services like if offer creative practitioners the invaluable opportunity to invest in their own futures
What three words would you use to describe what this opportunity means to South Australian artists?
Backing creative professionals.