The CFNE LOan Process
A Step-by-Step Guide to Funding Your Future
Our people-centered approach to connecting with potential borrowers, underwriting loans, and prioritizing relationships is part of what makes us different from your typical lender. Your success is our purpose and our flexible process reflects that.
First Things First – Who do we lend to?
We are mission-driven to lend to co-ops in New England and New York. We define co-ops as businesses that are democratically owned and controlled by the people who use it. Workers use the co-op business as employees, farmers use marketing and distribution co-op as producers, residents use housing co-op as their home, consumers use food co-ops to get the groceries they want…..and the list goes on.
The Typical Journey of a New Borrower
This is where you are getting to know us and reaching out for the first or first few times. If you have not already, follow us on social media (Facebook–Linkedin–Instagram–Youtube) and sign up for our newsletters to stay in touch.
You can also read our mission and vision here, and see who else we’ve made loans to here.
Congratulations, you’ve made it to step 2! This means you feel ready to talk 1-on-1 with a member of our Lending Team. To do that, you will submit an inquiry using this contact form on our website or call us at 800-818-7833. From there, your area’s Loan Officer will follow-up with you to learn more about your needs, identify how we can help, and talk to you more deeply about the Loan Process.
If you decide that applying for a loan with CFNE is right for you, you’ll enter into this Loan Readiness stage. During this stage, your Loan Officer will continue to work closely with you to make sure your application is complete.
Depending on your stage of business, we’ll help you identify any technical assistance that you need, and connect you to those resources — this will help you gather supporting documents and information to submit with your application.
Please Note: Because we are a mission-based lender, some of the information we request is demographic to help us make sure we are serving the people we intend to serve! You can find our Loan Application here, and learn more about our CDFI Demographic Data Requirements here.
Your loan officer will make sure you know the deadlines for submitting your application, and it usually takes about 3 to 4 weeks to get a decision once your completed application is submitted.
The heavy lift for you is over, but there is still some work to do with your Loan Officer! During this Underwriting step, your Loan Officer is preparing an internal document we call a credit memo. A credit memo summarizes all the strengths and weaknesses of your loan application and recommends approval details to the group that will decide on the application.
Your Loan Officer will continue to stay in contact with you requesting additional information as needed, and sharing the recommendation they are making and the reasons they are making it.
This step is where the actual decision-making at CFNE takes place.
Depending on your loan application, you may be invited to meet with CFNE Staff (a committee consisting of your Loan Officer, another Loan Officer, the Deputy Executive Director and the Executive Director) and/or the Loan Committee (includes members of the Board of Trustees and community members from various co-op communities).
If the committee making the decision cannot approve your request, they will let you know why, and encourage you to apply again.
Once your loan is approved, you’ll work with the closing team to get the loan paperwork in place, so we can fund your loan. This step can take another 4-6 weeks on average.
The loan paperwork includes at least two legal documents: the co-op’s promise to repay the loan, and the contract describing how we will work together during the term of the loan. In some cases, it will be important for you to have a lawyer help you through this process, but it is not always required.
This step is also the time that we gather the demographic data about your co-op (mentioned in Step 3–Loan Readiness) that we need to report to our funders and to ensure we’re meeting CFNE’s mission.
We’re a small team, and your Loan Officer will stay connected to make everything go smoothly.
When you complete this step, your loan is officially closed then you move onto the final stage, servicing. A loan is a closed loan when all documents are signed and funds are accessible to the borrower.
The process is complete and you are now officially a CFNE Borrower. Now’s the time to celebrate!
During this ongoing servicing stage that lasts through the maturity of your loan, we will collect monthly loan payments, you will send quarterly financial information and keep us up to date on your business, and your Loan Officer will visit at least once a year to see how things are going.
Note to Borrowers Past, Present, Future: We are committed to requesting only the information we need and only when we need it. We do not collect personal credit scores, or other personal information. The information you do provide to us is kept confidential and secure.
We are not just your lender, but also a partner in your success. Your Loan Officer and our Learning Team are committed to helping you through challenges and amplifying your wins. If you need something we don’t offer, our growing referral network will surely be able to support you. Throughout this entire process, just about anything you need, is only an ask away.
Fee Schedule:
- Application Fee: $100, at time of application
- Loan Origination Fee: CFNE charges a fee equal to 1% of the total amount being borrowed, with a 50% deposit required when a loan offer is accepted, and the remainder due when the loan closes.
- Legal Fee: Additionally, the borrower is expected to pay for both CFNE’s and the borrower’s legal costs associated with the closing process, if any – In general, legal costs will be charged to borrowers when the loan is for a real estate purchase and/or for a complex business purchase.
What Now?
Decide where you are on your journey, then reach out to us; if you’re not sure, that’s ok too. You can call or email us at:
1-800-818-7833
cfne@coopfund.coop
Or, you can submit an inquiry using our online form:
