Why banks invest in the New Hampshire Community Loan Fund
Community investment: Banks see the merit and impact of investments in their communities. By using the Community Loan Fund as an intermediary, banks further their reach to those individuals, businesses and nonprofits that would not normally qualify for a loan from a traditional lending institution.
Trusted financial intermediary: The Community Loan Fund has received the highest national honor in our field: the Wachovia NEXT Award for Opportunity Finance. We have consistently received a sterling AAA+2 rating from CARS™, the national rating service for community investing, which measures community impact and financial soundness.
CRA requirements: We offer a special class of community development debentures that will permit “equity-like” investments that facilitate greater impact on economically disadvantaged communities. These subordinated debt instruments help banks meet their investment and lending tests under the Community Reinvestment Act. We also accept traditional senior loans from banks.
Social impact: Banks see an investment in the Community Loan Fund as an efficient and meaningful way of helping New Hampshire families with low and moderate incomes through the creation and preservation of housing, jobs and child care.
Lead sharing: The Community Loan Fund, by definition, makes loans to individuals and institutions that regulated financial institutions cannot. Banks often refer potential borrowers to the Community Loan Fund, and many of those borrowers later become “bankable” – and become customers of those banks.
In short, by investing in the Community Loan Fund, banks can get funds to worthy projects and customers in their communities today – and create potential future customers.
Choice of terms: If making a regular senior loan, banks can choose terms as short as one year or as long as 25 years. All investors choose a fixed-rate annual simple interest return of up to 1% for loans of one or two years, up to 2% for loans of three or four years, up to 3% for loans of five or six years, up to 4% for loans of seven to nine years, and up to 5% for loans of 10 years or longer.
Risk: This is an unsecured investment. It is not insured by the FDIC, nor by any governmental or private entity. Investments with the Community Loan Fund are not liquid assets: They cannot be redeemed or traded before maturity. While the Community Loan Fund has not lost any lender's funds, past performance is no guarantee of future performance.
Benefit: Your funds are added to our approximately $75-million lending pool: The risk is shared, and an investor’s funds will not be dedicated to any single project or sector. Banks appreciate that the Community Loan Fund has an unblemished record of repayment to investors – through good and bad economic times. Investments in the Community Loan Fund are protected by our significant permanent capital and our excellent history of repayment from borrowers.
Uncorrelated investment: Investments at the Community Loan Fund are straightforward and uncorrelated to traditional fixed-income instruments. You will earn annual interest, and your principal remains whole, regardless of the ups and downs of the bond market.
A tradition of partnerships with New Hampshire banks: Local financial institutions invested at the Community Loan Fund include: Bank of New England, Bank of New Hampshire, Centrix Bank, Citizens Bank, Franklin Savings Bank, Lake Sunapee Bank, Mascoma Savings Bank, Meredith Village Savings Bank, Merrimack County Savings Bank, Ocean National Bank, Pentucket Bank, Piscataqua Savings Bank, Provident Bank, St. Mary’s Bank, Sovereign Bank, and TD Bank.
In addition, we have investors from other categories, such as foundations, religious organizations, and individuals.
Fixed maturity date: Your investment will have a fixed maturity date that can be renewed or paid out upon maturity, at your discretion.
Custom reporting: The Community Loan Fund has a 30-year history of working with institutional investors. We will send you the quarterly and annual reports that most effectively meet your requirements.
Next steps: To discuss how your financial institution can invest in the Community Loan Fund, please contact Sally Hatch.