The LPP is the BCF's core loan program that enables eligible minority-owned firms to obtain financing when funds are not available through conventional channels on reasonable terms. The following types of loans and credit facilities are accessible through the LPP:
All LPP loans are made by BCF Certified Lenders. The lenders risk is reduced as result of the BCF guaranteeing or participating in a major portion of LPP loans. As a result of the BCF's credit enhancement, lenders are able to provide financing that would otherwise be denied based on the lender's normal underwriting standards.
- Lines of Credit
- Contract Financing
- Intermediate Term Loans
- Working Capital Loans
- Equipment Financing
The BCF loan program is limited to ethnic/racial minority business enterprises that have been certified by a National Minority Supplier Development Council (NMSDC) affiliated Regional Council and have a supplier/vendor relationship with a corporate member of the NMSDC or an affiliate Regional Council of the NMSDC.
Credit decisions and loans in the LPP are made by participating lenders contingent upon the BCF's loan participation or loan participation and final loan approval. If approved, the BCF purchases a participation in the loan or guarantees up to 75% of the loan amount subject to maximum levels of retained risk on the part of the BCF.
The total amount of the LPP loan facility is determined by the participating lender; however the BCF's maximum exposure may not exceed $1,125,000 in a participation loan, or on a guaranteed loan. In each case, the participating lender must retain a minimum of 25% of the amount of loan facility.
The length of time for repayment depends on the type of loan, use of proceeds, and the ability of the business to repay; however the term of any given loan may not exceed seven(7) years. Maximum interest rates may not exceed 3% over prime.
Generally, the borrower must pledge sufficient assets, to the extent they are reasonably available, to secure the loan. Personal guaranties are required from all principal owners of the business. Liens on personal assets of the principals also may be required.
The lender monitors and administers the loan subject to BCF Operating Guidelines and Procedures.
Any Federal or state chartered bank, Savings and Loan Association, credit union or insurance company subject to government examination and regulation and in good standing is eligible to be a BCF Certified Lender. Other lenders with commercial loan experience and sound financial strength may also be approved.
At a minimum, the borrower needs to provide the lender with the following information when requesting a loan:
- Purpose of loan and source of repayment
- History of the business
- Financial statements for the most recent three years (existing business)
- Schedule of term debts
- Aging of accounts receivables and payables (existing business)
- Projection of income, expenses and cash flow together with assumptions used
- Signed personal and corporate income tax returns for the most recent three years.
Prospective BCF borrowers can Click here to download the BCF Application. Completed Applications should be submitted to:
Business Consortium Fund, Inc.
39 West 37th Street, 7th Floor
New York, NY 10018
A bank or lender is required for a BCF participation loan. Therefore, a prospective borrower should discuss BCF financing with his/her bank or lender. If the borrower's bank is not a BCF Certified Lender, or familiar with the BCF, they can contact the BCF to obtain information on the BCF Loan Program and to learn how to become a certified lender.
The BCF can help prospective borrowers find a bank or lender. Click here for a list of BCF Certified Lenders