A local credit union partnered with community organizations to facilitate loans for small businesses with needs not met through traditional lending. Leslie Ackerman of Alternatives Federal Credit Union is using this model and presented on it at the BALLE Business Conference.
The community organization brings the mission and raises the money.
The local investors and community contribute the capital.
The local lending institution manages the lending program.
The funds are deposited as a loan loss (collateral on the loans).
The community organization sets the lending policies.
The local people can invest in local businesses at lower risk.
The businesses get access to loans they might not otherwise fit, and the repayment is reported to build their credit history.
The financial institution gets to support the community.
The loans are made at a relatively low rate.
The deposits can earn a small amount of interest for investors.
Local lending partnerships like this are profiled in Local Dollars, Local Sense: How to Shift Your Money from Wall Street to Main Street and Achieve Real Prosperity–A Community Resilience Guide
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Nice instructions for the users involved in mortgages.