- Los
Angeles Community Development Bank
-
- (Not
a Commercial Bank) P.O. Box 480017 Los Angeles, CA 90048
1-888-LA-CDBANK 1-888-522-3226
- Fact Sheet
-
- MISSION
- The mission of
the Los Angeles Community Development Bank (LACDB) is to promote a
positive investment environment and sustainable jobs for residents
and others within the Los Angeles Supplemental Empowerment Zone. The
LACDB, working in partnership with community institutions, businesses
and civic leaders, will provide non-traditional loans, venture capital,
technical assistance and the connections that successfully attract,
start and expand business opportunities.
-
- HISTORY
- As part of an
expansion of the federal Empowerment Zone and Enterprises Community
Program, Los Angeles was selected as the site of a unique and experimental
community development bank. The Los Angeles region was granted a Supplemental
Empowerment Zone, making it eligible for special economic development
funding from the Department of Housing and Urban Development (HUD)
-
- In 1995, HUD
began working in close partnership with the City and County of Los
Angeles, community lenders, and a handful of commercial banks to create
the LACDB. Numerous economic development groups in the zone area participated
in the early cooperative planning process. By January 1996, arrangements
were finalized with HUD to obtain access to $1 million in working
capital to assist with start-up operations for the LACDB.
-
- ZONE COMMUNITY
- The zone encompasses
a geographical area 19 square miles in size and including communities
such as Pacoima, Boyle Heights, the East Downtown Corridor, the Historic
Corridor, Central Avenue, the Slauson Industrial Corridor, the Broadway
District, Watts, and Firestone and Willowbrook.
-
- The LACDB is
guided by representatives of the communities that it serves, with
the goal of providing financial backing to community-based business
enterprises that will in turn provide the quality employment opportunities
essential to the rejuvenation of these neighborhoods.
-
- BORROWER PROFILE
- The bank plans
to make loans to new or growing business within the zone. The bank
also expects to make loans through intermediaries, such as established
community lending programs, to finance job-creating businesses in
the area. In addition, the LACDB will partner with commercial banks
as a co-lender, putting together non-traditional loan packages of
multiple lenders or loan guarantors to bring near-bankable loans up
to standards required by commercial banks.
-
- LOAN PROGRAMS
- The LACDB plans
to operate a variety of programs to assist new and existing businesses,
including the following (see LACDB Products Fact Sheet for more detailed
information):
-
- Microloans
- Business loans
- Commercial real
estate loans
- Commercial loan
guarantee program
- Loan loss reserve
program
- Venture capital
- Business and
technical support programs
- Economic development
grants
-
- FUNDING
- The LACDB will
be capitalized with $430 million in HUD-approved economic development
assistance funds. Capital will come from a combination of $115 million
in city and county Economic Development Initiative (EDI) grants and
$315 million in HUD loan guarantees. In addition to federal money,
commercial banks have committed to lend up to $210 million for LACDB-financed
projects.
-
- LOAN ELIGIBILITY
- Any individual,
organization or company interested in doing business in the zone,
and who meets the lending standards and criteria of the LACDB, as
well as HUD program requirements, will be eligible to receive LACDB
financing. The bank will not reserve loans for minority-owned businesses
only; there will be no ethnic restrictions to eligibility.
-
- Like a commercial
bank, the LACDB must guard against loan defaults if it is to meet
its own financial obligations and recycle funds from repaid loans
into the community. Thus, the LACDB will lend money only to businesses
that have the capacity, collateral and character to repay their loans,
although its lending criteria will be more flexible than that of commercial
banks.
-
- For instance,
the LACDB may consider loan applicants that haven't been in business
as long, or that have a shorter history of showing a profit, or that
have higher levels of existing debt or a credit record that isn't
as strong as commercial banks typically would require. In fact, its
loans often may be to applicants that have been turned down previously
by commercial banks or other lenders, such as the Small Business Administration.
-
- FINANCIAL
INTERMEDIARIES
- The LACDB will
work with existing community-based economic development groups to
help identify projects and businesses that fit LACDB criteria to receive
financial assistance. These groups will serve as financial intermediaries
and will be a direct link between the community and the bank. Financial
intermediaries will either serve as lending agents for the LACDB or
as loan packages and will have a contractual relationship with the
bank. The LACDB Board of Directors is currently working with HUD and
the city and county to define who is eligible to participate as a
financial intermediary, what their role will be and how their activities
will be monitored.
-
- BOARD OF
DIRECTORS
-
Jae Min Chang
- President and
Publisher
- The Korea Times-Hankook
Ilbo
-
- Martha Diepenbrock
- Independent Consultant
for youth & national service organizations
-
- Debra S. Esparza
- Director
- USC Business
Expansion Network
-
- Denise G.
Fairchild, Ph.D.
- President
- Neighborhood
Strategies Group
-
- John M. Gallarza
- Vice President
and Branch Administrator
- TransWorld Bank
-
- Antonio Gonzalez
- President
- Southwest Voter
Registration Education Project &
- Southwest Voter
Research Institute
-
- Ozie B. Gonzaque
- Chairperson
- Housing Authority
Commission
-
- John Gray
- Executive Vice
President
- First Interstate
Bank of California
-
- Christopher
W. Hammond
- President
- Capital Vision
Equities
-
- Pastor Noel
Jones
- Pastor
- Greater Bethany
Community Church
-
- Alfred Osborne
- Director
- Harold Price
Center for Entrepreneurial Studies
- and Associate
Professor, John E. Anderson Graduate
- School of Management,
UCLA
-
- Gilbert T.
Ray, Esq.
- Partner
- O'Melveny &
Meyers
-
- Teryl Watkins
- President &
Director of Development
- Watts Labor Communications
Action Committee
-
-
http://www.ezec.gov/invest/labank.html
Copyright © Larry Elder & Associates
- All rights reserved.
Send mail to Larry@larryelder.com
www.larryelder.com
|