An Impact-Linked Loan is similar to a traditional loan, with the main exception that interest rates (potentially even repayment obligations) are tied to borrowers’ achievement of pre-defined and independently verified social outcomes. The enterprise receives “better terms for better impact”. The higher the impact achieved by the impact enterprise, the lower the interest rate to be paid. In specific scenarios and contexts (e.g. particularly difficult market environment or crisis) additional loan forgiveness can be agreed upon for achieving additional pre-defined outcomes.