The following represents a sampling of frequently asked questions raised by prospective member organizations:

Can any size organization or community become a TCCCF member?

There is no minimum or maximum size eligibility requirement for organizations or communities to become members of the TCCCF. In fact, the Fund is designed for and encourages the participation of communities of all sizes, as well as nonprofit economic development organizations that want to increase their development financing capacity.

The funds that we have available locally to invest in the TCCCF were originally received from the Minnesota Department of Employment and Economic Development (DEED) under the Minnesota Investment Fund grant program. These funds were loaned to a local business and the repayments are being used to capitalize my local revolving loan fund (RLF). Can I use this money to join TCCCF?

Yes. The State Legislature enacted an amendment to Minn. Statute 116J.8731, subd.2 2000 that specifically authorizes local government units to do so.

How about using city general fund dollars for this purpose?

Yes, again. Minn. Statutes 469.191 authorizes cities and towns to appropriate not more than $50,000 annually out of their general revenue fund for organizations like the Minnesota Community Capital Fund. In addition, Minn. Statutes Section 412.211 provides broad powers to municipalities, including the authority to support local economic development projects. TCCCF’s attorney has issued a detailed legal opinion concerning the statutory authority under which Cities, Economic Development Authorities, Housing & Redevelopment Authorities and Port Authorities may participate in the Fund. A copy of this legal opinion is available upon request by calling Scott Martin at (952)546-9049.

Once we’re a member of the TCCCF, can we increase our initial participation level in order to be able to originate larger loans from the Fund?

Absolutely. TCCCF members are able to increase their participation amount in the Fund at any time in order to meet their changing needs and to make the most of this new financing resource.

If we are a member of the TCCCF and later decide to terminate our membership, how and when will the funds that we deposited in the Fund be returned to us?

Membership in the fund is subject to both a participation agreement and a loan fund escrow agreement, which requires members to make a minimum three-year commitment to the TCCCF. Members may withdraw their money from the loan fund escrow account anytime after three years from the date of their deposit. TCCCF will return all member Loan Fund deposits, without interest, within 30 days upon written request of the member.

As a member of the TCCCF, do we have the right to appoint a representative to the Board of Directors?

No, but a representative of your organization will be eligible for election to the nine-member Board that will govern the TCCCF. Six of the nine board members will be elected by the membership at the organization’s annual meeting. Since the corporation has three classes of membership (based upon the member’s contribution level) each class of members will elect two directors. The six elected directors will be responsible for filling the three at-large director seats.

Who will manage the Fund?

The Northland Institute, a Minnesota nonprofit corporation established in 1996, will provide all necessary management services to the TCCCF during at least the first three years of operation. After this initial period, the Board of Directors may either continue to contract for fund management services or hire staff to manage the Fund.

Who will pay for the cost of fund management?

The primary revenue sources that will be available to pay for fund management services and all operating expenses are the interest earnings on the pooled funds contributed by TCCCF members and loan origination fees paid by our borrowers. Members are not required to pay directly for any services provided by the fund manager that pertain to the structuring of TCCCF loans.

How will the Fund be recapitalized?

The TCCCF will be a self-sustaining development resource, with recapitalization of the Fund through the sale of pre-approved loans to a specialized secondary market for economic development loans. The sale proceeds from TCCCF loans are immediately returned to the Loan Fund. Through this approach, the TCCCF Loan Fund will be continually recapitalized and funds will be readily available to make new loans at all times.

What drives the price paid for a loan?

Institutional investors who purchase economic development loans seek a market rate of return. Accordingly, loans that are priced at market rates receive par value. Those priced above the market earn a premium, while those priced below the prevailing market are bought at a discount. However, in every case, the originating TCCCF member decides whether to offer the loan at par value or at a rate either below or above par.

How flexible are the Fund’s lending policies?

The TCCCF is designed to provide a great deal of flexibility in terms of borrower eligibility, interest rates, loan terms and conditions, equity requirements, etc. The Fund’s lending focus will be on business and community economic development financing activities. TCCCF members are encouraged to work closely with the fund manager in structuring loan packages that are responsive to their needs.

Is there a limit on the number of loans that a TCCCF member can originate?

No. The only limit is on the size of each loan that may be originated by a member from the Fund. Members will be able to originate loans of up to ten (10) times their TCCCF participation amount.

Is there a cost to join the Twin Cities Community Capital Fund?

New members pay only a one time $5,000 membership fee to join the Fund.