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California Community Health Center Financing Program


About The California Endowment's Program-Related Investments (PRI) RFA


The California Endowment (TCE) has partnered with Capital Impact Partners and Community Health Center Capital Fund to provide low cost loans to:


(1) Increase access to the quality care provided by community clinics and health centers as a means to improve health outcomes,

(2) Spur economic development that supports healthy communities, and

(3) Encourage innovation in the way care is organized and delivered.


Program-related Investments (PRIs) from TCE, along with capital from Community Development Financial Institution (CDFI) partners, will combine to provide low cost financing for community clinics and health centers with capital expansion plans that are able to support debt and have the ability to repay a loan. Acceptable uses of loan proceeds include: acquisition of land and buildings, new construction or renovation, leasehold improvements, and equipment purchases. Loan proceeds may not be used to refinance existing debt.  


Eligibility Requirements


California based nonprofit, tax-exempt community clinics and health centers (CCHCs) as defined under Section 1204 of the California Health and Safety Code are eligible to apply. Clinics may be Federally Qualified Health Centers (FQHCs) or FQHC Look-Alikes, as well as school-based health centers or mental health centers operated by FQHCs or FQHC Look-Alikes.


Applicants will be evaluated based on mission fit, financial strength, diversity, organizational capacity, leverage, scale and impact, and portfolio fit.


Investment Criteria

Community clinics and health centers interested in applying for financing must exhibit:


  • Strong financial condition with a clear ability to repay the loan
  • Strong management and governance
  • Financial management expertise with good financial systems and reports   
  • Well-planned project with an experienced development team
  • Collateral with a market value sufficiently greater than the loan request
  • Market analysis supporting projected patient demand and payer mix  

Additionally, strong loan applicants will be able to demonstrate:  


  • Evidence of quality health services 
  • Improvement in accessibility and delivery of health services
  • Significant community engagement and support for the project 
  • Potential to achieve increased scale, sustainability, or innovation in delivering services
  • Potential to attract financing or other resources from public or private co-investors 
  • Organizational diversity in leadership, governance, and range of stakeholders 

Preference will be given to clinics that promote TCE priorities:  


  • Located in and/or serving residents of Building Healthy Communities (BHC) sites:
  • Actively engaged in enrolling persons into coverage and care
  • Actively engaged in whole-person care, including referrals to social services 
  • Actively promoting prevention care and working towards achieving Patient-Centered Medical Home recognition
  • Co-located with other critical services, such as affordable housing, schools, child care facilities and public transit
  • Encourages community engagement and empowerment  
  • Advances local BHC priorities
  • Utilizing primary care physicians and non-physician practitioners to provide healthcare in health professional shortage areas in California

Application Process  


TCE and its partners will announce two-month application periods in which eligible community clinics and health centers are able to apply online. The current application period is June 2 through July 31, 2014. Any subsequent financing rounds will be announced at a later date. CCHCs are advised to apply for financing for projects that will require capital three to nine months after the application deadline.


After review of the materials submitted, eligible applicants may be asked to submit additional information to supplement their application. Applicants will go though a rigorous due diligence process including a site visit to assess applicant capability and capacity to successfully complete the proposed project. Applications must be approved by the CDFI partner loan committee and TCE Board of Directors.

California Community Health Center Financing Initiative
Projected Financing Terms

Use of Loan Proceeds

Acquisition / Construction /Leasehold Improvements

Equipment/EHR Implementation
Interest Rate
Loan Term
Up to 10 years
Up to 7 years
Amortization of Loan Term
Up to 15 years
Up to 7 years
Loan Size

Up to $5 million

Larger loans may be considered on a case by case basis.

$250,000 to $2 million

Loan Repayments

Interest-only monthly payments during construction, followed by monthly installments of interest and principal based on the amortization of the loan.

Monthly installments of interest and principal based on the amortization of the loan.

May be prepaid at any time without penalty or premium.
May be prepaid at any time without penalty or premium.

First position lien on subject property and additional collateral as necessary. Loan-to-value not exceeding 90%, based on as-completed appraised value.

First position lien on equipment purchased with loan proceeds and additional collateral as necessary.

Origination Fee
1.25% of loan amount
1.0% of loan amount
Additional Fees

Borrower is responsible for costs of all third party reports, legal, accounting and documentation expenses, and closing costs associated with closing of the Loan, as required by the Lead Lender.

Financial Covenants To be determined during underwriting and will include debt service coverage ratio, leverage ratio, current ratio, and/or number of days cash-on-hand.
Reporting Covenants

To include annual audited financial statements, annual operating budgets, social impact data reports, UDS reports and quarterly internally-prepared financial statements

Underwriting and Funding

Lead Lender will review the application package and ask for additional information such as 5-year cash flow projections. For construction loans, Lead Lender will review, among other items, the construction contract, the architect contract, the experience and track record of the general contractor and the architect, the plans and specifications, the building permit, and the detailed project budget and timeline. The funding for construction loans will be controlled by Lead Lender that will approve draw requests on a monthly basis.

Borrower Eligibility

1) A private, not-for-profit corporation that operates one or more primary care or family planning clinics licensed by the State of California under Section 1204 of the California Health and Safety Code.

2) A private, not-for-profit consortium with majority membership comprised of primary care or family planning clinics licensed by the State of California under Section 1204 of the California Health and Safety Code.

3) A clinic operated by a federally recognized Indian tribe and which is located on land recognized as tribal land by the federal government.

Loan Use Restrictions

1) Loans cannot be used to refinance existing debt.

2) Loan proceeds shall not be used to carry on propaganda or otherwise attempt to influence legislation, or participate or intervene in any political campaign on behalf of, or in opposition to, any candidate for public office, or to influence the outcome of any specific public election.