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Surviving Tough Economic Times

Surviving Tough Economic Times. NALCAB Summit El Paso, TX July 17, 2009. Community Development Lenders. What It Means to be an “Intermediary” “Matching” Maturities Pressure Full Recourse Borrowing by LISC Our Lenders are in “Our Kitchen” LISC and CDCs are Public Charities

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Surviving Tough Economic Times

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  1. Surviving Tough Economic Times NALCAB Summit El Paso, TX July 17, 2009

  2. Community Development Lenders • What It Means to be an “Intermediary” • “Matching” Maturities Pressure • Full Recourse Borrowing by LISC • Our Lenders are in “Our Kitchen” • LISC and CDCs are Public Charities • Mission vs. Credit Squeeze

  3. Traditional Conventional Lenders • Consequences of Dissolution/Subsumption of CD Units • Timing is Particularly Bad • Orient New Community Development or Bank Commercial Staff to Our Industry • Get to the Special Asset Folks • Talk about Multiple Pathways to Repayment

  4. How Intermediaries Can Help • Striving to be Patient • Partial paydowns will help • Alternative and/or additional collateral • Development of New Lending Products and Approaches • Policy Advocacy for Community Development • Telling the Responsible Lending Story

  5. Focus on Current CDC Financial Condition • Embracing Current Reality • Transparency or “Circling the Wagons”

  6. Focus on Current CDC Financial Condition Red Flags: • Liquidity Crunch • High Budget to Actual Variance • Revenue Falling Short • Quarterly Internal Statements – How Prompt is the Delivery? • Overdue Audit

  7. Focus on CDC Future • Importance of Cash Flow Projections • Realistic Forecasting • Assumptions • Stress Testing • Contingency Planning • CDC Capacity to Produce Projections

  8. Focus on CDC Future • Future Development Likely at Lower Level • What New Operating Models are Being Explored? • Expanded Program Goals • Leveraging Capacity and Funding Through New Partnerships • New Federal Funding Opportunities • Should Merger or Acquisition be Considered?

  9. LISC Contact Information • www.lisc.org • www.ruralisc.org • http://www.lisc.org/content/publications/detail/8246 “Robust Cash Flow Projection” • http://www.lisc.org/content/publications/detail/7926 “Working with Lenders”

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