Lending Policies

 The standards that the Fund uses in evaluating and deciding upon loan requests include the following:

• the need for and importance of the services provided by the co-op;
• the viability of the organization;
• the commitment and support of its members;
• the skill and effectiveness of its management;
• the adequacy of its capitalization program;
• its current and prospective financial condition;
• the adequacy of available collateral; and
• the ability of the co-op to repay the loan.

The Fund's lending practices are characterized by an unusually high degree of fairness, flexibility and service. Program loans are provided for any reasonable purpose. The interest rates charged to borrowers are below or at market levels, and repayment terms are arranged to accommodate the needs of the borrowing organization. The only fees are a $100 loan application fee and a one point closing fee.

All borrowers are required to pledge adequate collateral as security for their loans, but the many contacts of the Fund among cooperative organizations in the region allow it to accept collateral of a type and quantity at variance with commercial lenders.

The terms and conditions of the loan agreement entered into with borrowers are significantly less restrictive and obtrusive than most commercial loan contracts. The agreement is nevertheless a detailed and comprehensive one that is fully protective of the legal rights and financial solvency the Fund. Reporting requirements, are quite strict in requiring borrowers to submit substantial information on a regular and timely basis. The Fund is thus able to closely monitor the financial performance and organizational development of its borrowers. The Fund provides technical assistance services to its borrowers in connection with the loan application process and subsequently as circumstances warrant. The education and experience of staff and Trustees of the Fund allow it to provide a wide range of quality services, particularly in the areas of organizational development, financial management, and training in consensus process.