Bridge Loans for Impact
In a Cash Crunch?
Open Road is committed to supporting you on your journey to impact.
Our loans help social enterprises and nonprofits overcome obstacles to impact as they challenge the status quo to create a better world.
From the tele-health company requiring additional equipment and staff due to rapid demand during COVID-19, to the social enterprise facing a delayed Series A investment due to Brexit, Open Road loans ensure innovative efforts to address the world’s greatest challenges can carry on without interruption.
An Open Road Loan Keeps Impact on Track
- New regulatory requirements
- Changes in personnel
- Policy changes
- Changes in investment committee schedule
- Funder strategy shifts
- Pause on investments
- Unexpected travel
- Third-party delays
- World events
- Maintain momentum for entering new markets
- Continue on-time payment of staff salaries
- Enable partnership opportunities requiring upfront investments
- Avoid “starvation” of the business
- Ensure steady resources for longer-term growth
A mid-implementation project is one that is otherwise fully funded, staffed, and designed. If not for this unexpected roadblock or opportunity, there would be no outstanding need.
A project that encounters an unforeseeable roadblock or opportunity. This includes changes in government regulations, laws, or tariffs; a crop-destroying virus; unusual weather conditions; or other events exogenous to program design.
A one-time, one project loan to address a specific solvable problem that arose mid-implementation. Once provided, no additional funds should be necessary from Open Road or any other funder to see the project through completion.
A catalytic project expands impact significantly beyond a one to one relationship, resulting in a multiplier effect. Catalytic implies exponential or leveraged returns.
We understand that emergencies can’t wait. We accept applications on a rolling basis. Our full process from inquiry to decision typically takes two to six weeks.
We’ll help you through it.
Our investment strategy is designed to keep impact first. We seek to maximize social returns while meeting financial requirements. We exist to serve the social sector, not the other way around. If you think that you are eligible for a one-time Open Road loan please submit an initial inquiry.
Loans: Frequently Asked Questions
Established in 2012, Open Road Alliance is a philanthropic initiative that serves the social sector by Keeping Impact on Track™ in an unpredictable world. We provide short-term solutions by disbursing fast grants and loans to nonprofits and social enterprises facing discrete, unexpected roadblocks during project implementation. We also conduct research and advocates for the adoption of long-term, system-wide risk management practices across the social sector.
Open Road Ventures is a fund established by Open Road Alliance, with proprietary capital, to disburse below market-rate loans. While ORV is a legally independent entity, it is wholly managed by Open Road in accordance with our philanthropic mission. The loan fund is designed to break even, covering the costs of any potential losses. Any income generated from interest will be used as reserves to absorb future losses. No earnings will be distributed to investors.
The Impact Fund is the first fund by Open Road that is open to outside investors including family offices, foundations, and impact-first investors. Impact Fund loans range from $100,000 to $1M and are extended to social impact organizations located primarily in Africa, U.S., Latin America, and South Asia.
In contrast to the Open Road Impact Fund, ORV is not open to external investors.
Open Road is sector (issue area) and geographically agnostic and serves both nonprofits and for-profit social enterprises of any size. Our funds are only used to support mid-implementation projects facing unexpected obstacles or sudden catalytic opportunities that can expand their impact.
- Average loan size: $250,000, max $1M
- Interest rates: 2–5% for non-profits, 5–10% for social enterprises
- Average term: 9 months, ranging from 30 days to 24 months
- Open Road is not solving for the greater working capital issue in the sector, but providing a, “bridge to somewhere.”
- Our three types of loans are: (1) a bridge to committed funding, (2) help with delays in accounts receivable and (3) an unexpected opportunity for impact such as an unexpectedly large purchase order.
In 2017, after five years of funding nonprofits and social enterprises facing roadblocks, we learned a lot about “what goes wrong” during project implementation and what organizations need to overcome those barriers.
From observation, empirical data, and many, many conversations with our social impact partners, we realized that oftentimes the problem is not a lack of money in general, but a lack of money NOW. In other words, whatever the cause of the problem, the result in financial terms is simply a cash-flow issue. In these cases, additional funding is coming–whether through a committed grant, equity raise, confirmed sales, or other source–but it is not coming quickly enough to address the problem at hand. As such, these organizations need a financial bridge–a loan–to keep impact on track while waiting for the additional, committed funds. Once those pre identified funds come in, Open Road is paid back.
In addition to loans, Open Road also continues to make charitable grants to both nonprofits and social enterprises in cases where an organization does not have committed revenue or expected income.
Open Road is able to generate greater impact through loans because the funds are recycled over and over to multiple organizations pursuing their social missions. Serving more organizations ultimately means more impact across the sector.
Loans are offered at below market rates, ranging from 2-10%, depending on the market, to serve as a bridge or working capital. The average loan term is 9 months, with a range of 30 days to two years. By charging interest at below market rates, Open Road is able to preserve the value of its capital in the face of inflation, as well as cover expected losses. Open Road Ventures is not designed to generate profits and Open Road Impact Fund distributes below-market returns to investors.
Open Road Alliance and Open Road Ventures are solely and privately funded by its Founder, Dr. Laurie Michaels. The Open Road Impact Fund is funded by a variety of investors.