We are now accepting applications for the NESsT Lirio Fund Open Call from enterprises in Brazil!
The NESsT Lirio Fund invests in small and medium-sized enterprises that create dignified income opportunities and improve livelihoods while contributing to environmental conservation throughout Brazil, Colombia, and Peru, particularly in the Andes and Amazon.
About the Fund
The NESsT Lirio Fund addresses the challenges faced by entrepreneurs in the region, specifically meeting their need for patient capital and financial management support in order to grow sustainably.
In addition to offering long-term, patient financing, the NESsT Lirio Fund provides extensive, tailored business assistance to its portfolio companies, supporting them to diversify their client base, navigate financial, strategic, and operational challenges, and enhance their impact measurement and management. NESsT’s technical assistance also supports its portfolio to fulfill their loan commitments while preparing them to secure larger, longer-term loans from more traditional sources.
The Fund aims to produce a significant impact in job creation for 30,000 people from marginalized communities in South America in the next 5 years.
Financing Conditions
ASCAMPA, NESsT portfolio enterprise in Brazil
Investment size: Loans between USD $100,000 and USD $500,000.
Types of financing:
Purchase order financing (re-evaluated every 2 years)
Structural working capital (up to 3 years)
Long-term financing (up to 5 years). Structure according to the organization's needs.
Maximum grace period of one year
Currency: US dollars.
Guarantees: Often includes inventory, accounts receivable, fixed assets, land, among others. It will be analyzed on a case-by-case basis.
Business Criteria
The Fund will be directed to companies that have the following characteristics:
Annual sales for the last year of at least $200,000 or R$1,000,000
Company stage: at least 2 years of operational history and the ability to produce basic financial statements to make informed business decisions.
Business activities that impact communities in Brazil. Those companies that are located or work with communities in the Amazon will be given greater consideration during the evaluation.
Have sales in a foreign currency.
Competent and experienced management team. Historical sales that show a positive trend and a sustainable business model with growth potential.
Provide financial statements for up to last 3 years (for companies that have been operating for more than 2 years) and financial projections for the term of the loan.
Have achieved the break-even point or be projected to break-even within the next 6 months
Companies that have organic, Fair Trade and/or Rainforest Alliance certifications will be given greater consideration during the evaluation.
Impact Criteria
The Fund will be directed to companies that benefit communities and sectors in need in any of these ways:
Commitment to social impact: companies dedicated to combating poverty and exclusion by providing and/or facilitating opportunities for decent and formal employment and/or improving the livelihoods of marginalized communities (ethnic minorities, vulnerable women, people with disabilities, youth at risk, small producers and artisans, etc.)
A direct impact on the income of the marginalized people impacted.
A positive impact on at least 100 people from excluded groups.
Most key inputs are obtained from communities in need, and/or by generating employment in them.
Environmental responsibility: organizations that actively work to reduce their environmental impact and are committed to continuously improving their environmental practices.
Sectors
We seek companies in sectors and markets where our loans can foster economic growth, improve rural livelihoods and/or generate decent employment opportunities for excluded people, such as:
ASSOAB, NESsT portfolio enterprise in Brazil. Photo © Bruno Kelly
Sustainable agriculture
Sustainable fishing
Food and beverages
Eco-tourism in protected areas
Natural products (for example from biodiversity areas)
Textiles (ethical fashion)
Inclusive employment and professional development (models for training, educating. and placing people in the labor market)
Green/environmental technology (digital products and services that help reduce the negative impact on the environment)
Other sectors will be considered on a case-by-case basis
We invite you to apply by completing the following steps:
Please review the application form and prepare all the required information
Submit your application by October 31st, 2024
Frequently Asked Questions
What are the requirements to apply? Can I apply if my company is a start-up?
Ideally, the company should have been in the market for at least 2 years, and it will be a requirement to present financial statements for the last 3 years, in the case it has been operating longer.
What are the application dates?
We are reviewing applications continuously until October 31st, 2024. The response time to each evaluation will depend on the company's application date.
What are the geographical restrictions to apply?
The call is focused on Brazil. However, if the company is incorporated outside but has operations in this country, it will also be considered.
What happens if my sales in the last 12 months are less than USD $200,000 or R$1,000,000?
NESsT has other programs in the acceleration sector, aimed at smaller companies. If your sales are less than that amount, we invite you to review the calls for other programs.
Do I have to pay an application fee or is it free?
Applying to the NESsT Lirio Fund is free, you can do it at this link.
Are there any sector/industry restrictions to be able to apply to the NESsT Lirio Fund?
We will consider any sector whose business model supports the employment of vulnerable communities. However, we do not finance microfinance institutions or companies that give loans to third parties.
Once I have applied, what is the process and how long will it take to know if I can get a loan with the NESsT Lirio Fund?
Our process is divided into three parts: level 1, level 2 and confirmatory process. The entire process takes between 3 and 5 months from the initial submission of the application, depending on the information provided by the management teams. The time to close the loan will depend on the speed and quality of the material provided by the management team.
What are the interest rates offered by the NESsT Lirio Fund?
Interest rates will depend on the credit assessment and risk of each company.
Does the NESsT Fund require collateral to grant a loan?
Normally, the NESsT Fund requires collateral for at least 70% of the loan amount. These can be accounts receivable, inventory, fixed assets, land, and other options. However, this is addressed on a case by case depending on the business.
For what purposes can these loans be used?
The purposes can be working capital, financing of purchase orders abroad, purchase of machinery and equipment, purchase of existing debt, expansion into new markets and/or development of new lines of business. Other uses will be evaluated on a case-by-case basis.
What are the main evaluation criteria before the Investment Committee?
The Investment Committee of the NESsT Fund will mainly evaluate: 1) financial risk, 2) scalability of the business and product/service, and 3) social and environmental impact.
What other benefits can I obtain through a loan with the NESsT Lirio Fund?
In addition to the loan, through our Business Assistance Facility we provide advice and masterclasses throughout the year in different business areas.
How should I verify the social and/or environmental impact of the company?
NESsT is dedicated to supporting organizations that create sustainable and decent jobs for low-income communities directly or indirectly through the supply chain. We would like to understand how your strategy would use our loan to create at least 50 jobs for low-income people in the next 1 to 2 years or to increase the income of 100 people from marginalized communities.
Should I apply if we have never accepted financing in the form of debt?
Yes. NESsT focuses on helping social enterprises that have difficulty accessing traditional sources of capital.
Should we apply if we do not have a CFO?
Yes. It is important that borrowers participating in the fund are prepared to keep strong financial records and build a team that can carry out sound financial management, but NESsT recognizes that many teams are still developing these skills. We would work to develop a plan for the management team to have this financial capacity in-house shortly after closing the loan.
How many years of financial projections do I need to submit to apply?
We require financial projections of the Profit and Loss Statement, Balance Sheet and Cash Flow for the term of the loan being required.
Cover photo: ASSOAB © Bruno Kelly