twenty20_ab3bbaab-7f5b-4a58-9cb3-74ae347

BANKS &

CREDIT UNIONS

BEDF_ID type_2-line stack black.png

PRODUCTS FOR BANKS

& CREDIT UNIONS

Image by Sven Mieke

Loan Participations

The  Black Economic Development Fund (BEDF) can purchase loans from bank portfolios, in whole or in part, in order to provide liquidity or income to the bank as well as potentially increasing the spread on existing loans in the bank’s portfolio.

Advantages for Minority Development Institutions (MDIs)

  • Liquidity for redeployment

  • Increased Spread / Income 

  • No customer competition

  • Retain servicing income

Loan Target

  • Loan Participation Size: > = $1M in total

  • Loan Term: < = 5 years

  • Yield Requirement:

    • > 3-5% on real estate

    • > 5-9% on business

Loan Underwriting Requirements

  • LTV: < 90%

  • Months Performing: >12 months

  • Servicing Paid: 25bps

Loan Growth

The Black Economic Development Fund (BEDF) will be originating loans with black-owned businesses in a wide variety of asset classes. The BEDF would be open to selling participation in those loans to a bank partner to help increase good assets for that bank.

Advantages for Minority Development Institutions (MDIs)

  • Acquire strong performing assets

  • Diversify loan portfolio

  • Acquire new customer relationships

 

Loan Target

  • Loan Participation Size: > = $1M in total

  • Loan Term: < = 5 years

  • Yield Requirement:

    • > 3-5% on real estate

    • > 5-9% on business 

 

Loan Underwriting Requirements

  • LTV: < 90%

  • Months Performing: > 12 months

  • Servicing Payment Required: 25bps

Image by Ivan Bandura

Acquisition

The BEDF will accept and expedite co-investment referrals from partner banks with the intention of co-investing in that opportunity with the bank thereby helping the bank retain or acquire that customer relationship. These transactions may also result in increased loan diversity or volume for the partner institution.

Advantages for Minority Development Institutions (MDIs)

  • Upsize your maximum loan amount

  • Customer acquisition or retention

  • Lower the blended rate to the borrower

  • Increase banks rate on their portion of the loan

  • No customer competition

  • Retain servicing income

 

Loan Target

  • Loan Co-Investment Size: > = $1M in total

  • Loan Term: < = 5 years

  • Yield Requirement:

    • > 3-5% on real estate 

    • > 5-9% on business

 

Loan Underwriting Requirements

  • Collaterol Coverage: < 90%

  • Servicing Paid: 25bps

smiling-afro-woman-in-blazer-wear-glasse

Signature Deposits

The BEDF will seek to place signature deposits or purchase CD directly in MDIs that have a liquidity need. The goal would be for this capital to stay in the MDI for the duration of the Fund (7 years). We will review the MDIs financials to determine liquidity need and impact to the MDI. 

Advantages for Minority Development Institutions (MDIs)

  • Deposits to fuel loan growth

  • Below market deposit cost

  • Reduction of interest expense

 

Deposit Target

  • Deposit Size: > = $1M - $3M

  • Loan Term: < = 2 years (renewed over 7 years)

Deposit Requirements

  • Annual renewals in the case of CD

  • 10 – 25 bps

*This is a summary of some, but not all of the terms and conditions upon which the Black Economic Development Fund would be willing to provide financing. All financing is subject to BEDF underwriting standards and guidelines, internal BEDF credit approval, and availability of funding.

Are you a bank or credit union interested in learning more?

The investment pools sponsored by LISC are available only to eligible investors, are offered only pursuant to their official offering documents, and are managed by LISC Fund Management, which is a wholly-owned subsidiary of LISC.  LISC Fund Management is an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”).  Registration of an investment adviser with the SEC does not imply any level of skill or training. Please visit the SEC’s website at www.adviserinfo.sec.gov to see LISC Fund Management’s Form ADV, which contains important disclosures, including further disclosures about material conflicts of interest, risks, and limitations associated with LISC Fund Management.