I recently served on an access to capital panel with
Michael Banner, president and CEO of the
Los Angeles Local Development Corporation (LDC). A
community development financial institution (CDFI), the mission of the LDC is to provide business loans to people and communities under-served by traditional financial institutions.
Targeting distressed communities and under-served ethnic groups (such as
Latinos,
African Americans and
Asians) in the greater Los Angeles area, Banner and his team use a common sense approach to structuring creative loans to solve complicated problems a typical
bank might shun. While the
LDC may go where others fear to tread, Banner is an experienced banker and proudly claims that “we are prepared to take more risk, but we don’t do
stupid”.
Since assuming the leadership role in 1995, Banner has grown the LDC’s assets to over $14 million from $4 million by focusing on business loans which are catalytic in nature. The impact to the community is even greater than the numbers would suggest as LDC often convinces other, more hesitant lenders and socially responsible investors to participate once it takes the lead. The loan amounts range from $25 thousand to over $5 million. The interest rates charged on all loans reflect the risk entailed and are often competitive with
interest rates charged on
SBA loans – don’t expect to see interest rates lower than what a bank might charge but Banner does say, “we don’t pretend, we just lend”. Success stories include loans to
Homeboy Industries’ Silkscreening Division, the
Big Saver Foods Shopping Center and
Mao Foods.
With a double bottom line focus, LDC always
asks how much of a difference the loan makes to the community. As
real estate and
fixed assets are often a visible symbol of that impact,
real estate loans and term loans comprise almost 75 percent of LDC’s total loan portfolio. The balance of the loan portfolio consist of a wide variety of credits ranging from revolving lines of credits, equipment loans, and asset based working capital facilities to middle market borrowers, but LDC often leads participations or co-lends with other lenders to meet the larger borrowing needs of its clients.
LDC can help a business with its
business loan requirements in a number of ways and thus serve many more borrowers than one would think given its small number of employees. In addition to being a direct lender, LDC can bring in other lenders as partners, syndicate entire loans and also serve as an
advisor in structuring tax exempt loans for the acquisition of business real estate. Well connected within the financial community, LDC can direct borrowers to the right place even when they are not the solution themselves.
Don’t live in the Los Angeles area? More than 1,000 CDFIs operate in low-wealth communities in all 50 states and the District of Columbia. CDFIs can be
banks,
credit unions, loan funds,
venture capital funds, community development corporations or
micro enterprise loan funds. All are united in their primary mission of community development. Check out the
CDFI website for a similar organization in your neighborhood!
May the lenders you approach only offer you treats and no tricks! And beware of black cats dressed as pumpkins!
Angel investor groups are expanding their investment outlook beyond tech and Internet start-ups according to The Wall Street Journal.
Small business lender ACCION Texas is organizing its first Summit on Microfinance in the country and has received a commitment from Federal Reserve Chairman Ben Bernanke to deliver the keynote address.
Bank of America announced it has been named the top Small Business Administration (SBA) lender in the nation for the tenth consecutive year. Bank of America made 10,878 SBA 7(a) loans with an average amount of $30,863 and totaling $335.73 million to entrepreneurs during the 2007 SBA fiscal year, which runs from October 1, 2006 to September 30, 2007.
For the sixth consecutive year, the U.S. Small Business Administration (SBA) set records for the number and volume of the loans it guaranteed in its fiscal year 2007, which ended September 30th.
According to today's Wall Street Journal (Prior Loans, Future Pain?), commercial and industrial business loans has risen at a 52% annual rate since late July. Based upon Federal Reserve data, this increase in business loans is the fastest growth rate for an 11-week period in more than 30 years.
I'm always interested in the search terms used to find my blog.
I recently served on an access to capital panel with Michael Banner, president and CEO of the Los Angeles Local Development Corporation (LDC). A community development financial institution (CDFI), the mission of the LDC is to provide business loans to people and communities under-served by traditional financial institutions.
According to the LA Times, the good times may be back for the vulture lenders. Oh, excuse me. I meant the investors in distressed debt.
Guess which matchmaker for business loans was featured on the front page of the business section in today's Daily Breeze?
It's official. According to the Fall 2007 Economic Outlook survey of PNC, the bank that small business loves, there's no credit crunch.
Yellow iron. The equipment financing sources love this stuff. It’s got long useful lives, slow obsolescence and a strong secondary market. From the September issue of a magazine for the leasing industry, here's the top five construction equipment financing sources.
You don't qualify.
