Financial Institutions

INVESTING IN THE FUND . . . a way for financial institutions to collaborate with an experienced and trusted community partner to build a healthier local economy!

Community Land Trust of Schenectady CountyThe Community Loan Fund of the Capital Region is a 501(c)(3) Community Development Financial Institution (CDFI), certified by the U.S. Department of Treasury,  providing loans, training and technical assistance to nonprofit organizations and micro entrepreneurs throughout the Capital Region.  The heart of our work is to offer community-minded investors and donors a practical way to help their neighbors and communities and promote economic justice.  Individuals, faith-based and civic organizations, foundations, trusts, businesses and most of the financial institutions in the area have invested through loans and/or donations to the Community Loan Fund, creating a lending capital pool so low-cost flexible loans can, in turn, be made to those who are unable to access conventional credit.  In this way, the Community Loan Fund provides an opportunity for financial institutions to participate as part of a lasting solution to poverty.

Why invest?

The Community Loan Fund offers financial institutions opportunities to support local, positive socio-economic change, sometimes involving projects which they are unable to commit to through their conventional lending programs :

  • Be part of the solution to existing problems by pooling money with other community-minded individuals and organizations to make a significant impact
  • Invest locally, in a socially responsible way and see tangible results
  • Provide affordable housing, decent jobs and quality social services
  • Help build the capacity of individuals and community-based non-profit organizations
  • Act on religious, political or philosophical convictions, aligning your money with your values
  • See your funds used again and again creating a renewable resource for our community
  • Earn social and economic dividends while strengthening local communities
  • Strengthen the local economy and future bank customers
  • Be a good corporate neighbor and build goodwill
  • Earn Community Reinvestment Act (CRA) credit

Who benefits from our investment?

EVERYONE!  Capital is essential to developing and maintaining healthy communities.  Small businesses are the backbone of our economy and community nonprofits provide vital services, frequently filling in the social and economic gaps in low-income populations and neighborhoods.   Since 1985, the Community Loan Fund has served as a unique resource to the entire Capital Region:

  • Lending capital for vital affordable housing and community development projects
  • Expanding access to capital and filling credit voids in low income urban and rural areas
  • Encouraging economic self-reliance and offering financial technical support
  • Providing a link between socially concerned investors and communities in need
  • Benefiting low-income people and neighborhoods and special needs populations

What are the results?

With a small—albeit determined—staff and over 500 donors, investors and volunteers, the Community Loan Fund has:

  • Closed over 700 loans to nonprofits, social and micro-enterprises totaling $36 million
  •  Created more than 1,075 affordable housing units
  •  Created or retained close to 1,500 jobs
  • Leveraged more than $155 million in local community and economic development
  • Provided training and technical assistance to thousands of micro and social entrepreneurs.

Just think of what we can do with your help!

How can financial institutions participate?

Local opportunities for banks, credit unions, and others, to support healthy communities, through the Community Loan Fund, include:

Donations and Grants for Outreach, Training, and Support

  • Operating Support:  Micro enterprise and community development work is very labor intensive and, thus, requires a significant amount of organizational resources to reach, counsel, educate, finance and support entrepreneurs and nonprofits.   Basic operating support is critical to our efforts.
  • Specific Programs:  Business plan training courses (with School of Business of The College of Saint Rose) and various specialized workshops throughout the year.  Support and sponsorships are needed.
  • Individual Development Accounts (IDA):  The Community Loan Fund manages the business component of this program (with the Affordable Housing Partnership) that provides financial literacy, business training and matching grants to low-income entrepreneurs to start or expand their business.

Donations and Grants to Revolving Loan Fund

The Community Loan Fund raises equity through donations and grants, enabling us to leverage additional capital – both debt and equity.  Many banks have provided equity contributions (no financial return) to help strengthen the Community Loan Fund, allowing us to make “higher-risk” loans, provide investor security and generate interest income to become partially self-sufficient.  Matching resources from banks (and others) greatly enhances the Community Loan Fund’s ability to compete for limited funds on a national basis.  For example, the Department of Treasury CDFI Fund usually requires a $1 to $1 match for grant applications – without the match, opportunities are lost

Below-Market Rate Loans To Revolving Loan Fund

  • Loans:  unsecured debt (up to $500,000) from banks (and others) at below-market interest rates.  The lower the rate, and the longer the term, the more useful to borrowers.
  • Loans Forgiven Over Time:  A few banks have converted debt to contributions over time (thus, potentially receiving CRA credit under the lending and investment tests).
  • Equity Equivalent Investment (EQ2): deeply subordinated debt with long term maturity

Referrals and Participation Loans

  • Loan Referrals:  Referrals work both ways – bank referrals to the Community Loan Fund and the Community Loan Fund referrals to banks. We welcome the opportunity to develop solid working relationships with individual lenders and banking institutions.
  • Participation Loans:  Over the years, we have had formal and informal “participation” loans with various lenders to assorted businesses and projects.

Other Relationships and Services

  • Human Resources:  The Community Loan Fund is a community-based organization that relies heavily on volunteers.  We value and appreciate support from a diverse range of community members.  Individuals may contribute by serving on committees, teaching at workshops, spreading the good word at work and at home, and in many other ways.
  • Deposits:  As a financial institution, the Community Loan Fund has various financial needs.  For example, favorable interest rates on deposits provide the Community Loan Fund with interest income to support our efforts.  Providing useful services, and waiving fees, are great ways to support the organization.

Banks, credit unions, and other financial institutions, are important partners in our efforts to improve the health and wealth of our communities.  Please consider joining us in any of the above ways, or propose a new one.

The Community Loan Fund of the Capital Region is a 501(c)(3) nonprofit corporation, as determined by the IRS.  Donations are tax-deductible, to the extent of the law.  Financial statements and annual reports are available upon request.

Why is the Community Loan Fund a trusted partner?

  • The Community Loan Fund has had a twenty-five-year record of accomplishments with timely repayments to investors resulting in a 100% perfect repayment rate to all its lenders, since 1985.
  • All investors share any risk but our cumulative loan loss rate is less than 2%.
  • Loans to the Fund are unsecured, but safety derives from a healthy loan loss reserve, loan monitoring, personal relations, responsible management and a shared sense of commitment by all parties.
  • Borrowers are supported with ongoing training and technical assistance.
  • We carefully evaluates each loan application and business plan and makes loans that are socially worthwhile and financially sound.
  • The Community Loan Fund is a member of the Opportunity Finance Network, which sets standards and best practices for member organizations.
  • The Community Loan Fund is certified by the U.S. Department of Treasury as a Community Development Financial Institution (CDFI), receiving  several competitive grants totaling over $2 million from its CDFI Fund as well as from NYS Empire State Development Corporation, based on annual business plans, delivery of its promised goals and sound fiscal management.

For more information, please contact Linda Chandler, Director of Development, (518) 436-8586 or linda@mycommunityloanfund.org.