Article Archives: Nebraska
Supporting Bond Financing in Rural Nebraska
The Nebraska Investment Finance Authority (NIFA) provides a broad range of financial resources for homeownership, rental housing, agriculture, manufacturing, medical services, community services, and community development. Through its Development Financing program, NIFA provides technical assistance to project participants to support financing through tax-exempt issuers, such as NIFA and Nebraska counties and cities.
Tax-exempt issuers have the authority to issue revenue bonds or other debt instruments, such as industrial development bonds, to raise funds used to finance eligible development projects. Bonds must meet certain federal and state law requirements allowing the interest they bear to be exempt from federal and state income taxes. The bond issues are repaid from the proceeds received by the issuer from the borrower under a revenue agreement, lease agreement, loan agreement, or installment sale contract.
Like all states with large rural areas, Nebraska has many distressed and underserved, nonmetropolitan, middle-income census tracts. Support for projects in these rural, middle-income census tracts or low- and moderate-income census tracts funded by public bond issues or other debt instruments may meet the definition of community development in the Community Reinvestment Act (CRA).
The Development Financing program offers technical assistance to borrowers seeking bond financing. Borrowers find their own lenders or bond purchasers either by direct placement with a financial institution or through a public sale using an investment banker. Interest rates are negotiated between the borrower and lender/investment banker. Generally, the maximum bond amount is $10 million, unless the project qualifies as an "exempt facility," such as solid waste facilities, nonprofit hospitals, or nonprofit nursing homes. For more information, contact Steve Clements, NIFA Chief Financial Officer, or call him at (402) 434-3908.
[Community Developments Investments, Spring 2009]
The Midwest Assistance Program Loan Fund
The Midwest Assistance Program Loan Fund (MAPLF) is a nonprofit organization that provides predevelopment loans to small rural communities in nine Upper Midwest States - Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, and Wyoming. Loans can be used for clean water and wastewater projects that serve lower-income populations. Borrowers from MAPLF are rural communities and other public water or wastewater authorities with less than 10,000 in population.
Established in 2003, MAPLF has closed seven loans totaling $105,000, has $250,000 more in process, and has sustained no losses. Loans have been made in four of the nine states in MAPLF's service region. MAPLF is an affiliate of the Midwest Assistance Program, which provides engineering, training, and other consulting services to help small rural communities plan and implement water and wastewater improvement projects. MAPLF typically funds projects that have multiple layers of funding, including grants and loans from a variety of sources. Originally capitalized with $100,000 from the Midwest Assistance Program, MAPLF also funds its loans with the proceeds of a federal grant, and is actively seeking new investors. Banks can participate by investing directly into MAPLF, by referring prospective borrowers that do not meet conventional credit criteria, and by structuring MAPLF into financing packages in which the banks would like to participate.
For more information, visit www.map-inc.org or contact Tom Kopp at (952) 758-4334 or email@example.com.
[Published in News from the Districts, Community Developments Investments, Spring 2006]
Rural Enterprise Assistance in Nebraska
The Center for Rural Affairs' Rural Assistance Project (REAP) is Nebraska's largest microenterprise program. REAP targets rural microenterprise through six regionally based business specialists. REAP provides access to capital, training, technical assistance and networking opportunities for Nebraska's small, rural business owners. REAP also maintains Nebraska's only Women's Business Center. This Center provides capital and support to women-owned rural small businesses. In addition to providing technical assistance and training, REAP provides direct loans for up to $25,000, a "peer-group/step up lending" program for loans up to $10,000, and a small business micro loan program for loans up to $5,000. REAP can assist small business owners in developing business plans. REAP and the Women's Business Center use the NxLevel Business Plan Basics for MicroEntrepreneurs curriculum to deliver the training in collaboration with the Nebraska EDGE program, the umbrella organization for rural entrepreneurial training programs. Nebraska banks can support REAP by: (1) referring small business owners with non-bankable loan requests; (2) by providing sponsorship for entrepreneurial training programs; and (3) providing technical resources.
For additional information contact Jeff Reynolds, REAP Program Co-Director at (402) 656-3091 or firstname.lastname@example.org.
[Published in News from the Districts, Community Developments, Spring 2006]
Cooperative Financing in the Upper Midwest
Northcountry Cooperative Development Fund (NCDF) is a for-profit, cooperatively owned loan fund that provides financing, training and expertise to small producer, consumer, affordable-housing, worker and land cooperatives in eleven states in the upper Midwest. NCDF today has more than $8 million in assets, has made hundreds of loans to cooperatives since its founding in 1978 and has contained losses since 1978 to 0.27 percent of dollars loaned. Investors in NCDF include banks, cooperatives, religious orders, foundations and others. Certified by the Community Development Financial Institution (CDFI) Fund as a CDFI and as a community development entity, NCDF also has funding from the U.S. Department of Agriculture to help develop and finance rural housing cooperatives, and NCDF last year established a community development credit union that helps members of cooperatives finance their membership shares. Banks are involved with NCDF as co-lenders, as investors and on the board of directors.
For more information, contact Margaret Lund at (612) 331-9103 or at email@example.com. NCDF's web site is www.ncdf.org.
[Published in News from the Districts, Community Developments, Summer 2004]
Nebraska Microenterprise Partnership Fund
Entrepreneurs build their livelihoods and their communities one job at a time primarily through small, family-operated businesses and farms. Microenterprises, businesses with five or fewer employees make up the majority of the small businesses in the United States. Microenterprise lenders are often in small rural communities and lack the resources to raise capital to fund their small business borrowers. The Nebraska Microenterprise Partnership Fund (NMPF), a community development financial institution, is a statewide financial intermediary providing funding for microenterprise loan programs. NMPF raises funds from national, state and private sources to fund grants and loans to microenterprise loan programs throughout the state of Nebraska. Access to funding and technical assistance through NMPF creates significant opportunities for new microenterprise lenders. NMPF has provided support for two microenterprise loan programs recently certified as community development financial institutions, the Self Employment Loan Fund of Lincoln Nebraska and Northeast Economic Development, Inc. in Norfolk, Nebraska. NMPF has received investments from financial institutions seeking to increase the level of microenterprise in the communities they serve. Investors include the state of Nebraska, the U.S. Small Business Administration, the U.S. Department of the Treasury Community Development Fund, US Bank, Wells Fargo Bank, and First National Bank of Omaha.
For more information please contact: Nebraska Microenterprise Partnership Fund (402) 846-5757; www.nebiz.org.
[Published in News from the Districts, Community Developments Investments, Summer 2004]
Venture Capital in the Midwest
Venture Capital Fund Hopewell Ventures, L.P. in July 2003 received its "Go Forth" letter from the U.S. Small Business Administration (SBA), a key step toward becoming a Small Business Investment Company. Hopewell, raising up to $150 million of capital, will invest $1 to $5 million in early- to later-stage companies in a dozen Midwestern states -- between Nebraska and Ohio, the Canadian border and Kentucky -- that Hopewell says are underserved by venture capital sources. Banks can invest in Hopewell Ventures as limited partners, can refer companies needing an equity infusion, and can provide banking services to companies in which Hopewell has invested. Hopewell's sister fund, $34 million Adena Ventures, serving Appalachian Ohio and West Virginia, was the first New Markets Venture Capital Company designated by SBA.
Contact: Tom Parkinson at (312) 357-9600; firstname.lastname@example.org; www.hopewellventures.com.
[Published in News from the Districts, Community Developments, Winter 2003]