Changes to RSF Prime

Dear Clients & Friends,

RSF has elected to lower the interest rate by 25 basis points (0.25%) for the third quarter of 2012. RSF Prime will now be 4.75% and investors will earn an interest rate of 0.75%.

RSF’s most recent pricing meeting was held in Sebastopol, CA earlier this month. This was the twelfth such meeting we’ve had since RSF made the decision to change how our quarterly interest rate is determined. Prior to October 2009, we used the London Interbank Offered Rate (LIBOR) as a benchmark to determine our rate of return. Since then we’ve been using this customized rate established by our Social Investment Fund (SIF) stakeholders — RSF staff, SIF investors, and borrowers in our Social Enterprise Lending program. The SIF investor rate is then added to a 4% spread (for RSF’s operations) and the resulting rate, named RSF Prime, is the base rate for borrowers.

This pricing mechanism is more deeply aligned with our values to make financial transactions as direct, transparent, and personal as possible. Further, we’ve been able to offer a significantly higher interest rate to investors than if we had continued using LIBOR.  Important to note: with this change in pricing, investors will continue to earn a rate several times that of a conventional bank CD.

Following the meeting we reflected on an important conversation that took place: would lowering RSF Prime make us more competitive in attracting high impact social enterprises in need of financing? Ultimately the answer was yes.

With that said, we are aware that the average RSF investor, for this next period, will experience a lower return (a decrease of $125 annually for the average $50,000 SIF Investment Note). For borrowers the impact is greater, as their average loan size is over $900,000, and their annual costs will be lowered by $2,000 to $2,500 annually.

We believe that lowering RSF Prime to 4.75% will help us retain and attract worthy projects to support through our Social Enterprise Lending program. To learn more about the projects we fund, visit the RSF Impact Map.

Thank you for your attention to this matter.  In a spirit of transparency, we are happy to talk with you about our decision directly.

Current investors can contact Mark Herrera, Senior Manager, Client Development at mark.herrera@rsfsocialfinance.org or 415.561.6160.

Current borrowers can contact Ted Levinson, Director, Lending at ted.levinson@rsfsocialfinance.org  or 415.561.6179.


With best regards,

Don Shaffer – President & CEO


Join the RSF Community
Invest your values Invest your values

RSF offers an easy way to invest in what’s important to you. Start your fund today with $1,000.

Learn more
Open a giving account Open a giving account

With a Donor Advised Fund, you can give when the timing is right for you and be part of an active community of donors and partners who share your passions.

Learn more
Get funding Get funding

If you’re an entrepreneur creating social or ecological change, apply for a loan to help you further your mission.

Learn more