Community Development Corporations Step In Where Business Fear to Tread
"Commercial defaults, continued restrictions on commercial lending, and the related problems facing retail ventures in our neighborhoods will have profound implications for economic development projects," writes Marcus Weiss.
But as credit tightens and higher and higher numbers of commercial real estate loans enter default, CDCs are stepping up to fill the financing gap in economic development deals as conventional lenders retreat.
"When Industrial Glass Products, Inc., a minority- and woman-owned specialty glass manufacturer that has operated since 1991 in a Los Angeles neighborhood with 98 percent minority population, observed most of its competitors west of the Mississippi closing their operations, it sought financing to expand," says Weiss. "Finding few banks willing to provide additional capital, it turned to TELACU Community Capital (TCC), a CDFI subsidiary of The East Los Angeles Community Union, one of the nation's largest CDCs. TCC provided a loan for working capital and real estate refinancing. The additional investment capital for machinery, equipment, marketing, and improved production schedules, allowed IGP to pursue customers previously served by competitors. As a CDC with years of experience in development, financing, and government contracting, TELACU understood the subtleties of supporting a company capable of growing jobs while working with a customer base of aerospace and other global firms."
Thanks to Matthew Brian Hersh