VCLF Community Investment Note

The Vermont Community Loan Fund (VCLF) creates opportunities that lead to healthy communities and financial stability for all Vermonters by providing loans, grants and technical assistance for affordable housing, small businesses, child care programs and community-based organizations.

The money VCLF lends comes from the community in the form of interest-bearing impact investments. VCLF investors include individuals & families, corporations & financial institutions, state & federal governments, foundations and nonprofits, faith-based groups and others who want to align their impact investments with their values. VCLF offers these impact investors a vehicle for achieving both financial returns and community impacts. Investors in the Vermont Community Loan Fund may also receive tax benefits.

VCLF is seeking to increase its loan fund through the issuance of promissory notes (hereinafter called “Community Investment Notes”). The investment objectives of Community Investment Notes are to maintain principal, to provide an opportunity to earn a modest financial return and to use these funds to make available financing for projects and businesses that benefit lower-income Vermonters. A range of options is available as to rates, terms and repayment schedules. This investment option is suitable for persons who are interested in investing in a sustainable and socially responsible manner.

Financial description

Financing needs to be met by VCLF include:
1. Loans to land trusts to acquire homes which are sold to leaseholders using a lease-to-purchase scenario;
2. Acquisition and rehabilitation of rental housing by nonprofit organizations;
3. Acquisition and construction loans for affordable housing or social service programs which are expected to receive grants or other long-term, low-interest permanent financing;
4. Loans to provide shelter for people who are developmentally disabled, young adults in SRS custody, individuals who were formerly homeless or elders in shared living arrangements;
5. Loans for acquiring buildings which will be used as food banks, child and elder care services or other programs benefiting low-income Vermonters;
6. Acquisition of property, equipment and working capital for small businesses;
7. Loans to for- and nonprofit child care businesses; or
8. Loans for production-based farm or agricultural enterprise.
Projects are evaluated on several criteria including:
1. The effectiveness with and extent to which the project/business provides resources to the community, encourages full participation, builds capacity and eliminates discrimination;
2. Ability/potential of the applicant to successfully carry out the project or business;
3. Ability of the applicant to repay the loan;
4. Ability of the loan to leverage other financing;
5. The applicant's access to technical assistance; and
6. Inability to find sufficient financing elsewhere.