05-10-2005 Council Agenda - Laserfiche WebLink

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Abbot% the. Fund Twin Cities Community Capital Fund N About Partners Board of Directors Staff Project Financing Examples About the Fund metacaNP Page 1 of 3 Finding the right financing to meet the needs of a growing business can be very challenging. Banks and other commercial lenders may not always be able to offer the type of financing that businesses need without the participation of another lender. That's where the Twin Cities Community Capital Fund comes in. The TCCCF is a nonprofit economic development loan fund that will soon offer customized, flexible financing solutions to fit most business needs. Our long -term, subordinated, fixed -rate loans, which will only be available in select Twin Cities communities, are made in partnership with local banks, other commercial lenders and our member economic development organizations. When we work with business owners and their banker, our goal is to help put together a complete financing package that meets everyone's needs. We always have money to lend.* The TCCCF is a self- sustaining economic development financing resource. Recapitalization of the Loan Fund is through the sale of pre- approved loans to a national secondary market. Our loans are structured to best meet the needs of our members, our borrowers, and participating lenders. One of the primary considerations for our members as loan terms and conditions are being negotiated is how the secondary market will price the loan for purchase. The actual price to be paid for TCCCF loans is known to the originating member before a final loan commitment is made. If the price offered by the market is discounted from par value (which only occurs when the member wants to offer below market rate financing to a borrower), the TCCCF member is responsible for funding the difference between par value and the loan sale price. There is no cost to members when loans are sold at par value. On the other hand, if the loan is sold at a premium, the member receives the premium payment (that amount in excess of the loan's par value). Under this approach, the TCCCF loan pool is continually recapitalized and our members are able to originate an unlimited number of loans in their communities. * TCCCF will begin accepting loan applications upon the successful completion of the Fund's initial loan fund capitalization and membership enrollment period, which is expected to occur by July 1, 2005. With a TCCCF loan you can finance: a Fixed assets, including land and building purchases. Building construction (permanent financing only). a Leasehold improvements and building renovations. a Macninery and eduipment purchases, renovation, and moving expenses. \Narking capital (when secured by fixed assets - -with a fixed repayrnent schedule). 7 .,.,i,,r ,.,, „r „h ,,. „ +, iKY-1i ^11115