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The Outcomes-Based Line of Credit: A New Model for Investing in Social Impact

A new LISC white paper and excel model explore how credit facilities can be an effective tool to help social service providers scale their programs and services using outcomes-based financing.

Introducing the Outcomes-Based Line of Credit

PFS financing at its essence is the bridging of an outcome receivable that we expect to be collectible based on agreed-upon targets. As we approach PFS 2.0 with the entry of rate cards, the financial modeling of PFS transactions can draw a lot of benefit from looking at how community development lenders have structured transactions for service providers bridging government or philanthropic receivables through borrowing base lines of credit.

Borrowing base lines of credit are credit facilities that have long been part of the Local Initiatives Support Corporation (LISC) wheelhouse of community development investments to social service providers. As we look to the expansion of outcomes-based financing, we believe a new type of borrowing base lines of credit, for which we’ve coined the term outcomes-based lines of credit, can be an effective tool to help social service providers receive the upfront bridge financing needed to expand their programs and services to achieve impact at scale.

This paper will walk through a traditional asset-backed borrowing base line of credit, then look at how this can be applied to the outcomes-based financing model.

Download White Paper [+]

Download Outcomes Line of Credit Template [+] (Opens Excel)