REDF Impact Investing Fund and Open Road Alliance Launch $1M Lending Partnership for Employment Social Enterprises in Response to COVID-19
SAN FRANCISCO, May 15, 2020 –In a newly-announced collaboration, REDF Impacting Investing Fund (RIIF) and Open Road Alliance (ORA) have combined their expertise and resources to create a $1M co-lending partnership to provide bridge and working capital financing to employment social enterprises in response to COVID-19.
Open Road Alliance is the market-leading organization dedicated to keeping impact on track by helping social entrepreneurs bridge short-term financing gaps. ORA provides short-term catalytic lending to ensure the social sector’s innovative efforts to address the world’s greatest challenges can carry on despite unexpected roadblocks.
REDF Impact Investing Fund (RIIF), is an independent 501c3 loan fund formed by REDF, a leading venture philanthropy with a 20+ year track record of investing in the most effective employment social enterprises businesses around the country.
Together the organizations forged the partnership to leverage their complementary expertise to meet the financing needs of employment social enterprises facing challenges from the economic impact of COVID-19, with the intention to make the process more efficient for borrowers while de-risking investments across both organizations. While ORA has partnered across sectors with international efforts, the collaboration with RIIF marks its first U.S.-based lending partnership.
“RIIF aims to be responsive to the financing needs of the employment social enterprise sector because these enterprises support and employ individuals who are even more vulnerable to the effects of COVID-19. We’re thrilled to partner with and learn from Open Road Alliance to ensure our social enterprise partners can continue creating impact in their communities,” said Carrie McKellogg, CEO of REDF Impact Investing Fund.
“Employment-focused social enterprises need access to fast and flexible capital. Now, more than ever we must lean into their needs because we need them to be successful. As the only funder exclusively focused on ‘when the unexpected occurs,’ we are increasingly focused on finding new ways to drive funding solutions at scale and view strategic partnerships as key to keeping the impact sector healthy. We believe this partnership with RIIF will help unlock the crucial potential of social enterprises to keep their impact on track,” said Open Road Chief Executive Officer, Maya Winkelstein.
One-time, short-term loans between $100-$250k will be available to REDF partners who run for-profit and not-for-profit businesses that hire and provide crucial support to individuals overcoming significant employment barriers, like homelessness and incarceration. Loan applicants must demonstrate historical profitability, have a clear plan for retaining or re-hiring program participants, and have a COVID-19 related challenge that can be solved through a one-time loan funding solution. Through this partnership, RIIF and ORA plan to make loans to up to 10 social enterprise businesses.
About Open Road Alliance
Open Road is the “emergency room” of impact for social enterprises and nonprofits, quickly providing short-term loans for one-time unexpected roadblocks and cash crunches. Founded in 2012, Open Road works across geographies and sectors. As the market leader in social sector bridge funding, its goal is to ensure innovative efforts to address the world’s greatest challenges can carry on without interruption.
Open Road Alliance deployed $43M+ in loans. To date, it has provided more than 270 grants and loans to 225 organizations across 60+ countries keeping $450M+ of impact on track.
About REDF Impact Investing Fund
Formed by REDF in response to demand for flexible capital from employment social enterprises, REDF Impact Investing Fund (RIIF) is a 501(c)(3) debt fund that provides loan capital and technical assistance to nonprofit and for-profit employment social enterprises. RIIF supports borrowers to improve their financial sustainability and strengthen their businesses so they can employ and empower more individuals striving to chart a new course in life.
REDF (the Roberts Enterprise Development Fund) is a pioneering venture philanthropy accelerating a national movement of employment social enterprises – mission driven, revenue-generating businesses that empower people striving to overcome employment barriers to get jobs, keep jobs, and build a better life. Independent research shows this approach works. It leads to greater economic security and mobility and a significant rate of return to society—$2.23 in benefits for every $1 invested. For more information, visit www.redf.org.
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