Hospitals

New $30M fund will help providers in underserved communities upgrade health services

Vital Healthcare Capital, a “social impact lender,” just launched a $30 million fund to provide loans for healthcare organizations that want to upgrade their services in underserved communities.

Vital Healthcare Capital, a new “social impact lender,” just launched a new $30 million fund to provide loans for providers that treat underserved patient pools.

The fund will dole out about $500,000 to $5 million to about 10 to 20 healthcare providers, V-Cap CEO Steven Weingarten said in a phone interview. These will involve mental and behavioral health providers, community hospitals and special needs health plans.

The fund’s mission is to be a source of flexible financing for provider groups in low income communities that are undergoing changes in their delivery systems – and support better integrated care for at-risk patients like seniors, those with disabilities, at-risk youth and those with behavioral health needs. Over the five years, the aim is to expand the New York-based fund up to $100 million.

“I think there’s a growing interest – and experimentation – in how social impact finance can be effective,” Weingarten said.

Indeed, in healthcare investing there’s been a broader trend toward venture philanthropy. V-Cap is of a similar ilk – stitching together investments from top-notch investors to help underserved populations expand their services – and then monetize them.

Investors in V-Cap include Atlantic Philanthropies, the Ford Foundation, JPMorgan Chase Foundation, MetLife, Dignity Health and Bank of America.

 

In an industry that’s changing and restructuring as rapidly as healthcare, being well-capitalized helps drive advancement. But healthcare providers treating underserved populations often don’t have the same kind of access to capital, Weingarten said.

“In many cases, we will be using our resources to bring in other sources of funds, such as leveraging grant dollars,” Weingarten said. “We expect to complete a number of deals as co-lenders, and participating investors.”

Vital Healthcare Capital launched last year, after a period of planning and development funded initially by the Ford Foundation, the Robert Wood Foundation and the Rockefeller Foundation.

V-Cap can provide facilities financing, business working capital and bridge financing – it has the flexibility to look at nontraditional uses of proceeds, Weingarten said. The loans are meant to last up to seven years, but there’s flexibility in that figure as well, he said.

[Image from flickr user zingbot]