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.
CFNE’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 (1% of the total loan amount, charged at the time of loan closing.) Legal and documentation fees are the responsibility of the borrower. CFNE does not charge pre-payment penalties.
All borrowers are required to pledge adequate collateral as security for their loans, but we utilize our deep knowledge of cooperatives to allow for collateral that would be deemed inadequate by conventional lenders.