Private sector’s appetite for ethical lending may be turning a corner – For Purpose Aged Care Australia announces landmark social loan to build beds

Following on from their 2024 $260 million joint debt facility with NAC, CBA and Bank Australia, For Purpose Aged Care Australia is showing no signs of slowing down. With messaging that has been overt, they are seeking to expand at pace to meet sky-rocketing demand in the aged care sector. This week the group announced, just over a year later, that they have secured a landmark Social Loan with the same trio. Alongside WA’s state $100 million below market loan offering, analysts have started to take note of movements in the capital market and what this indicates for the significantly warranted cash injections the sector needs to meet build and growth demands. As the aged care market consolidation continues with a proclivity to acquisition led growth, advocates are particularly keen to track capital injection to support the net gain of beds across the sector. Complementing the loan announcement, the group are bolstering their position to pursue national growth channels through the expansion of the executive team with two new key personnel, Gregg Funston and Rebecca Gill.

Two-pronged approach

The move to strengthen market position has come in two prongs this year for For Purpose Aged Care Australia (FPACA). With 2024’s quarter of a million loan to expand, the group brought aged care providers Luson and Signature Care under the group’s banner, cementing their strategy to gain market share. 2026 is seemingly bringing in a decision to be more flexible with growth strategies, particularly in the area of bed builds.

With the announcement of a landmark Social Loan from Bank Australia, CBA and NAB, alongside the expansion of the executive team, FPACA are shoring up resources for greater agility in a market that is developing rapidly. With these two key updates at the head of the year, FPACA are looking to capitalise on the staggering demand coming into the sector. For providers seeking to meet that demand, capital and agility have been noted as vital components in growth strategy.

Social loans

Mid 2022 saw the coining of the capital product “Social Loan”. CBA touted itself as the first lender to offer the product in Australia alongside APM. The product coming under the Asia Pacific Loan Market Association (APLMA)’s Social Loan Principles adheres to criteria relating to “employment generation, access to essential services (health and healthcare), and socioeconomic advancement and empowerment.”

The proceeds from Social Loans are detailed as being directed to finance or refinance funds connected to delivering social services by APM to “a range of target populations including those with disabilities, the unemployed and vulnerable groups.”

While the Social Loan product has been in operation for just over three years, the uptake has not been as prolific as advocates had wished. In seeing a substantial, as yet undisclosed amount, secured by FPIP and FPACA, analysts are keen to track with the private banking sector’s appetite to issue more of these loans, particularly in the aged care space.

With problems of profitability that has dogged many areas of the aged care facility, analysts perceive that with the prolific uptick in demand for beds and services in the sector, economic environments may be turning for a softening of capital willingness towards investment in the aged care market. FPACA may be the beginning of a new era of investment in aged care, some analysts attest.

Confirming the awareness from investors, Bank Australia Head of Impact Lending, Tim Von Ess shares that the appetite for sustainable finance contributing to quantifiable social results is evident.

He notes that in the capital markets, and in their internal operations, there is sentiment that involvement with access to safe, dignified aged care should be closely linked to their banking purpose.

Von Ess shared with Inside Ageing, “as a customer-owned bank, our customers want their money to be a force for good. Partnering with FPIP and FPACA allows us to help deliver high-quality aged care in regional Australia, benefiting residents, families and staff.”

Executives from both CBA and NAB made similar comments, CBA’s Craig McQuillen highlighted that the provision of the loan was in recognition of FPIP and FPACA’s vision to elevate access to aged care in communities with significant need. Dale Pattison of NAB pinpointed that entering into the loan agreement was affirming the necessity of collaboration between the finance sector to support results in the aged care and housing challenges Australia faces.

Growth phase

Messaging from FPACA’s established leadership team has for some time affirmed their commitment to a growth phase.

For Purpose Investment Partners (FPIP) noted that the new loan was their first senior debt social loan, highlighting it as a decisive marker to facilitate growth through new capital channels.

In further detail of their growth strategy in 2026 and future years, the group has commented that there will be a commitment to the growth approach of bed builds, with the intention to bring new net bed growth to Australia. From build to full operational management, FPACA intends to facilitate new quality residential aged care homes across the nation, with a particular vision of growing their footprint in regional areas without appropriate aged care offerings.

Speaking to Inside Ageing, FPIP Managing Director Victoria Adam notes the loan facility is a decisive point for the group in championing the confidence behind FPACA’s growth models.

She says, “this is our first senior debt Social Loan, and it cements our position as a leader in impact investing in Australia, backed by three banks that share our commitment to older Australians and regional communities.”

Leadership strengthening

As to the second prong of leadership expansion, Greg Funston joins the team as Chief Operating Officer and Rebecca Gill as General Manager of Strategy and Performance. With these two well-respected hires, FPACA cements its move to sustainable expansion at the national scale.

FPACA CEO Matthew Filocamo noted the additions were an indication of a precise vision to elevate the group’s operational and strategic foundations.

“Through the acquisitions of Luson and Signature Care, we now operate more than 2,000 beds nationally”, he says, and yet the group’s new direction of bed builds will also see it venture into the riskier territory of breaking ground and building from scratch.

The expanded executive group is a sign of positioning to meet the challenge of bed builds, a move that advocates and industry personnel say is highly needed but with slower provider commitment. With soaring land and construction costs, the lofty projected needs of 10,000 net new beds per year has much of the sector querying the road to get there. Provider announcements of willingness, position and financial viability to enter into bed builds are being uniformly met with welcome and close tracking.

As Filocamo publicly notes that the Social Loan and leadership growth is to set FPACA up in the position to secure sustainable growth and meaningful social impact, experts from within and outside of aged are looking to the tangible results of the loans’ use. As more data is yielded to the market of breaking ground and new net beds into the sector, funded by capital from socially aligned capital products, advocates are looking to see a market shift to acutely substantiate meeting the challenges of the sector’s growth.

As calls continue for all states to mirror WA’s $100 low-interest loan program, and landmark Social Loans are announced, industry leaders, advocates and seniors alike are looking to cross-sector solutions to meeting the stratospheric bed build projected needs linked to Australia’s ageing population. Many hope that FPACA and FPIP’s announcement is the start of many such aged care and finance market orientations to facilitate growth.