VCLF Community Investment Note
United States of America
Last updated 11 May 2020, by Impactyield.
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.
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.
Equal rights to ownership basic services technology and economic resources
Safe and affordable housing
Universal access to safe and nutritious food
Promote policies to support job creation and growing enterprises
Develop sustainable, resilient and inclusive infrastructures
Increase access to financial services and markets
Key performance indicators
Asset manager: Vermont Community Loan Fund
Product track record: Fund has 35 years of track record
Target IRR: 2.2%
Committed Capital: 37,739,033 USD (US Dollar)
Target return category: Below risk-adjusted market-rate of return
Fund domicile: United States of America
Product status: Open - committed capital
Inception year: 1987
Vintage year: 1988
Target close date: n.a.
Product term: 1 - 10+ years
Assets under management: n.a.
Investment size: Min: 1,000; Max: 1,000,000; Avg: 130,000
Currency of investments: USD (US Dollar)
Currency for fund / product figures: USD (US Dollar)
Fund investments to date: 3
Fund investments to date exited or repaid: 2
Management fee: n.a.
Carried interest: n.a.
Hurdle rate: n.a.
GIIN Investors' Council Investment: Yes
Limited Partners / Investors: Breakdown of investor category, based on $ outstanding as of 12/31/16: 39% Individuals & Families, 27% Federal Government, 11% Banks, 8% Faith-based Institutions, 4% State & Local Government, 4% Other Community Development Financial Institutions, 3% Foundations, 2% Other Nonprofits, 1% Corporations, 1% Other
Limited Partner / Investor Type: Development Finance Institution (DFI), Endowments/Foundations, Family Office, Other Institutional Investors, Retail Investors
Since its inception, the Vermont Community Loan Fund has made approximately 950 distinct loans exceeding $95M, with an estimated impact of creating or retaining jobs for 5,600 Vermonters, building or rehabilitating safe, affordable homes for 4,000 Vermont households, creating or retaining quality early childhood care & education for 3,850 children and financing community organizations serving hundreds of thousands of Vermonters.
Organizational goals, as stated in our Articles of Association (rev. 11/2013):
- Make loans and provide assistance to projects that provide access to and control over housing, access and availability of quality early childhood education and care, access and availability of essential community services and economic opportunities including employment for low- and moderate-income and other disadvantaged groups;
- Encourage the elimination of discrimination in access to housing, child care, credit and economic opportunities;
- Promote models of ownership or tenant control that prevent speculation and guarantee that housing remains affordable for successive generations;
- Support projects and educate and advocate for activities that lead to beneficial impacts on the natural environment; and
- Educate and advocate for investments in affordable housing, early childhood education and care, community services, small businesses and entrepreneurship, the revitalization of neighborhoods, downtowns and the working landscape.