1.2 THE CONTINUUM
Every instrument sits on one line, from pure grant to commercial capital
6 min
Objective
Place any instrument on the continuum of capital.
Impact firstFinance first
Grant
Recoverable grant
Results-based grant
Concessional loan
Impact investment below market
Impact investment at market rate
Commercial investment
Where this series takes you
Not your role
Definition
Recoverable grant
Money that returns to the funder only if the programme generates income.
In practice
It lets a funder test a revenue model without asking the organisation to take a loan.
Definition
Results-based grant
Money paid on verified outcomes instead of on activities.
In practice
The budget stops being a list of costs and becomes a price per result.
Definition
Concessional loan
Money repaid on terms softer than the market would offer.
In practice
A lower interest rate, a longer tenor or a grace period, provided by a funder who accepts a lower return.