$5 million loan program aims to shore up Texas safety-net clinics during COVID-19

A new emergency loan program developed by Episcopal Health Foundation (EHF) and financed by the Austin Community Foundation will aim to help clinics remain open during COVID-19 – a time when Safety-net clinics across Texas have been hit hard by the financial contraction wrought by the pandemic.

According to a recent EHF news release, the $5 million Texas Clinic Emergency Loan Fund offers selected federally qualified health centers (FQHCs) and other charity clinics up to $1 million in low-interest loans to help offset reduced revenues from fewer routine patient visits, shifts to telemedicine, increase in uninsured patients, and other additional expenses caused by COVID-19.



Lost patient revenue in conjunction with added costs associated with COVID-19 protocols have catalyzed the closure of many clinics. Dental and vision clinics were particularly impacted. Other clinics had to temporarily close locations due to staff exposure to the virus.

EHF has indicated that most of the participating clinics have had to invest in new equipment and technology for telemedicine. Additionally, clinics are also seeing a significant uptick in uninsured patients, which has led to millions of dollars in unplanned costs for some of the clinics.

“Many of these community clinics have seen their revenues drop by 60%, while costs for things like telehealth, COVID-19 testing and PPE keep rising,” said Elena Marks, Episcopal Health Foundation’s president and CEO. “There’s a limit to traditional grants from philanthropy that can help these clinics, but the loan program works as potential ‘recyclable funding’ to keep more clinics up and running to serve low-income families who may need the care now more than ever.”

Thus far, six FQHCs that each have multiple clinic sites have secured loans ranging from $250,000 to $1 million, through the Texas Clinic Emergency Loan Fund. The loans require no payment in the first year, and have a three-year repayment term. Across the six clinics, service communities include the greater Houston, Austin, and 20 Texas counties. All in all, the participating clinics see more than 280,000 patients annually across 100 different locations.

The loan fund is a component of a $20 million EHF Impact Investing Program. According to EHF, the program will enable the organization to use financial tools like debt and equity investments in for-profit and non-profit organizations to advance the same strategies the foundation seeks to achieve through traditional grantmaking.

EHF says it partnered with Austin Community Foundation on the loan fund because of its experience in impact investing in Texas.

“The health and economic consequences of COVID-19 have pressed the philanthropic sector to seek creative solutions that are not bound by the confines of traditional grantmaking,” Mike Nellis, chief executive officer, Austin Community Foundation, said. “By partnering with Episcopal Health Foundation, our organizations are able to provide alternative financial vehicles to meet the needs of community clinics as they navigate operating in a pandemic environment.”

The initial funding for the Texas Clinic Emergency Loan Fund was developed by EHF. Austin Community Foundation serves as the fiscal sponsor and distributes the loans. EHF’s news release indicated that Avivar Capital serves as the fund’s program administrator, implementing the fund in partnership with national leaders in impact investing, clinic financing and loan administration.