randall at fundingforall.
03-06-2007, 04:27 PM
Hello:* I found the information, much to my surprise, when I was reviewing internal reports years ago. Unfortunately, I can't afford the time to seek out that information for you at this time - I'm spending my available time conducting a private offering for a new venture to do micro lending and serve the Unbanked/Underserved.
*
The name of the bank was Gateway American Bank of Florida, and the last year I ran it, when we earned 15% ROE was 1996.* If you choose to look into the FDIC site and study the UBPR's you might be able to find information relating to loan size.*
*
As I may have mentioned*earlier, the other than very low charge-offs, the key reasons why*Gateway made money*where others did not are reasons that are not reflected by accounting data:
When a loan does go bad, there are no collection costs. No lawyers eat up fees that may or may not be recovered from collections.* No lending officer and bank director time spent either - a very significant expense in opportunity costs. Your clients reduce marketing expenses by becoming a sales force - Gateway did very little marketing, growing by client referrals was enough. Interest rates were significantly higher than larger loans. In nonprofit circles many people do not understand that there is no such thing as a "fair" rate. When a business can use the proceeds to generate a 1000% return ( a number lower than that cited in micro enterprises in the developing world, and often surpassed in my experience), how "fair" is it to deny the loan because the bank can't make enough to make it worth its time. I had a client that borrowed money to fulfil contracts with the city of Miami, so the loan lasted for only a matter of 6 weeks.* A loan for $30,000 generates about $600 at 18% interest for the bank. The client's rate of return was 286% ( he made 10,000 profit from the $30,000 sale in 6 weeks. That's 33%*in 6 weeks). I hope that helps,
*
Best regards,
*
Randall
*
*
Stewart E Perry <stewartp@igc.org> wrote:
Do you have any publications or reports on your bank, especially anything that would explain why the bank could make money on loans that other banks are are afraid of?
*
*
----- Original Message -----
From: Randall Benston (randall@fundingforall.com)
To:
Sent: 1/12/2007 11:01:21 PM
Subject: Re: CDFI "PROFITABILITY" OR NET REVENUE VS. AN EARNED INCOME - GRANT INCOME MIX
I don't know if this will help any, but I started a regular commercial bank in Florida in the '80's that primarily served small businesses and immigrants, so it was somewhat of a de facto CDFI even if it was not one in name. About 75% of my loans were micro loans (under $25,000). These were predominantly to businesses.* We were making 15% ROE by my last year as president, and we were just starting to get traction.*
Randall Benston
Funding For All
Warren Hanson <whanson@gmhf.com> wrote: v:* {behavior:url(#default#VML);} o:* {behavior:url(#default#VML);} w:* {behavior:url(#default#VML);} .shape {behavior:url(#default#VML);} <?XML:NAMESPACE PREFIX = O /> st1:*{behavior:url(#default#ieooui) } Can anyone on the listserv direct me to good data on the degree to which CDFIs are able to achieve self-sufficiency (earning all their revenue from lending and service income; not including grant support)?
Has their been a study or survey, or is there useful anecdotal information as in articles? *
I am familiar with the 2005 study by Kirsten Moy on Pathways to Scale which is great but doesnt address the specific issue of how CDFIs are commonly managing to remain solvent, achieve breakeven or better than break even.
Thanks,
Warren Hanson
cid:4140952201000001@web50811.mail.yahoo.com
Warren Hanson, President
Greater <?XML:NAMESPACE PREFIX = ST1 />Minnesota Housing Fund
332 Minnesota, Suite 1310-E
Saint Paul, MN* 55101
651-221-1997 ext: 107
651-221-1904 fax
whanson@gmhf.com (whanson@gmhf.com)
Link to: gmhf. com (http://www.gmhf.com/)
Links to GMHF Program Areas:
Minnesota Green Communities (http://www.greencommunitiesonline.org/minnesota/default.asp?nc=849&id=1)
Building Better Neighborhoods (http://www.gmhf.com/programs/bbn/default.htm)
Employer Assisted Housing (http://www.gmhf.com/programs/eah/program_profile/EAH.htm)
Portraits of Home Exhibit (http://www.gmhf.com/portraits/index.htm)
Growth Corridor Initiative (http://www.gmhf.com/programs/gci/GMHF-GCI-Program-Book.pdf)
Funding for Affordable Housing (http://www.gmhf.com/programs/)
From: bounce-1000076-4990454@list.cornell.edu [mailto:bounce-1000076-4990454@list.cornell.edu] On Behalf Of Bill Dodson
Sent: Friday, January 12, 2007 3:14 PM
To: Randall Benston; communitydevelopmentbanking-l@cornell.edu
Subject: RE: Re: New Market Tax Credits
Ditto on everthing said.* National City Bank has an allocation also. Theirs is structured differently.* Contact Jackie Winchester in Columbus at 614-463-8109.
William Dodson
Dayspring Christian CDC
-----Original Message-----
From: bounce-999612-5194527@list.cornell.edu [mailto:bounce-999612-5194527@list.cornell.edu]On Behalf Of Randall Benston
Sent: Friday, January 12, 2007 3:00 PM
To: communitydevelopmentbanking-l@cornell.edu
Subject: Fwd: Re: New Market Tax Credits
Randall Benston <randallbenston@yahoo.com> wrote:
Date: Fri, 12 Jan 2007 11:44:09 -0800 (PST)
From: Randall Benston <randallbenston@yahoo.com>
Subject: Re: New Market Tax Credits
To: JIM MARTONE <JMARTONE@COUNTYCORP.com>
CC: communitydevelopmentbanking-l@cornell.edu
Jim - The NMTC would not be a direct benefit for you, because it is a program for organizations that are for-profit, and even if you started a for-profit subsidiary you'd have to apply for a hyper-competetive program that is funded only once a year.* So you would want to apply for a loan to an organization that has received an allocation of tax credits under NMTC with the hope that they will be more attractive in their terms, rates, and/or credit standards than other potential lenders.*
Your best bet is the Ohio Community Development Finance Fund (Finance Fund)James R. Klein, (614) 221-1114, jrklein@financefund.org* They received a NMTC allocation last year.*
You can go to http://www.cdfifund.gov/what_we_do/programs_id.asp?programID=5
on the CDFI website and see the yearly list of awardees for the each year there.
Good luck,
Randall Benston
JIM MARTONE <JMARTONE@COUNTYCORP.com> wrote:
Can someone give me a brief explanation of how a social service agency (non-profit) would benefit by using NMTC for the purchase rehab of building they want to use as their headquarters. Thank you
Jim Martone
Vice President of Housing
CountyCorp
40 West 4th Street, Suite 1600
Dayton, OH* 45402
937-225-6328
Randall Craig Benston
404-964-5458
Randall@FundingForAll.com (Randall@FundingForAll.com)
www.fundingforall.com (http://www.fundingforall.com/)
Randall Craig Benston
404-964-5458
Randall@FundingForAll.com (Randall@FundingForAll.com)
www.fundingforall.com (http://www.fundingforall.com/)
Randall Craig Benston
404-964-5458
Randall@FundingForAll.com (Randall@FundingForAll.com)
www.fundingforall.com (http://www.fundingforall.com/)
*
Randall Craig Benston
404-964-5458
Randall@FundingForAll.com (Randall@FundingForAll.com)
www.fundingforall.com (http://www.fundingforall.com)
*
This post transferred from the cdb-l mailing list
*
The name of the bank was Gateway American Bank of Florida, and the last year I ran it, when we earned 15% ROE was 1996.* If you choose to look into the FDIC site and study the UBPR's you might be able to find information relating to loan size.*
*
As I may have mentioned*earlier, the other than very low charge-offs, the key reasons why*Gateway made money*where others did not are reasons that are not reflected by accounting data:
When a loan does go bad, there are no collection costs. No lawyers eat up fees that may or may not be recovered from collections.* No lending officer and bank director time spent either - a very significant expense in opportunity costs. Your clients reduce marketing expenses by becoming a sales force - Gateway did very little marketing, growing by client referrals was enough. Interest rates were significantly higher than larger loans. In nonprofit circles many people do not understand that there is no such thing as a "fair" rate. When a business can use the proceeds to generate a 1000% return ( a number lower than that cited in micro enterprises in the developing world, and often surpassed in my experience), how "fair" is it to deny the loan because the bank can't make enough to make it worth its time. I had a client that borrowed money to fulfil contracts with the city of Miami, so the loan lasted for only a matter of 6 weeks.* A loan for $30,000 generates about $600 at 18% interest for the bank. The client's rate of return was 286% ( he made 10,000 profit from the $30,000 sale in 6 weeks. That's 33%*in 6 weeks). I hope that helps,
*
Best regards,
*
Randall
*
*
Stewart E Perry <stewartp@igc.org> wrote:
Do you have any publications or reports on your bank, especially anything that would explain why the bank could make money on loans that other banks are are afraid of?
*
*
----- Original Message -----
From: Randall Benston (randall@fundingforall.com)
To:
Sent: 1/12/2007 11:01:21 PM
Subject: Re: CDFI "PROFITABILITY" OR NET REVENUE VS. AN EARNED INCOME - GRANT INCOME MIX
I don't know if this will help any, but I started a regular commercial bank in Florida in the '80's that primarily served small businesses and immigrants, so it was somewhat of a de facto CDFI even if it was not one in name. About 75% of my loans were micro loans (under $25,000). These were predominantly to businesses.* We were making 15% ROE by my last year as president, and we were just starting to get traction.*
Randall Benston
Funding For All
Warren Hanson <whanson@gmhf.com> wrote: v:* {behavior:url(#default#VML);} o:* {behavior:url(#default#VML);} w:* {behavior:url(#default#VML);} .shape {behavior:url(#default#VML);} <?XML:NAMESPACE PREFIX = O /> st1:*{behavior:url(#default#ieooui) } Can anyone on the listserv direct me to good data on the degree to which CDFIs are able to achieve self-sufficiency (earning all their revenue from lending and service income; not including grant support)?
Has their been a study or survey, or is there useful anecdotal information as in articles? *
I am familiar with the 2005 study by Kirsten Moy on Pathways to Scale which is great but doesnt address the specific issue of how CDFIs are commonly managing to remain solvent, achieve breakeven or better than break even.
Thanks,
Warren Hanson
cid:4140952201000001@web50811.mail.yahoo.com
Warren Hanson, President
Greater <?XML:NAMESPACE PREFIX = ST1 />Minnesota Housing Fund
332 Minnesota, Suite 1310-E
Saint Paul, MN* 55101
651-221-1997 ext: 107
651-221-1904 fax
whanson@gmhf.com (whanson@gmhf.com)
Link to: gmhf. com (http://www.gmhf.com/)
Links to GMHF Program Areas:
Minnesota Green Communities (http://www.greencommunitiesonline.org/minnesota/default.asp?nc=849&id=1)
Building Better Neighborhoods (http://www.gmhf.com/programs/bbn/default.htm)
Employer Assisted Housing (http://www.gmhf.com/programs/eah/program_profile/EAH.htm)
Portraits of Home Exhibit (http://www.gmhf.com/portraits/index.htm)
Growth Corridor Initiative (http://www.gmhf.com/programs/gci/GMHF-GCI-Program-Book.pdf)
Funding for Affordable Housing (http://www.gmhf.com/programs/)
From: bounce-1000076-4990454@list.cornell.edu [mailto:bounce-1000076-4990454@list.cornell.edu] On Behalf Of Bill Dodson
Sent: Friday, January 12, 2007 3:14 PM
To: Randall Benston; communitydevelopmentbanking-l@cornell.edu
Subject: RE: Re: New Market Tax Credits
Ditto on everthing said.* National City Bank has an allocation also. Theirs is structured differently.* Contact Jackie Winchester in Columbus at 614-463-8109.
William Dodson
Dayspring Christian CDC
-----Original Message-----
From: bounce-999612-5194527@list.cornell.edu [mailto:bounce-999612-5194527@list.cornell.edu]On Behalf Of Randall Benston
Sent: Friday, January 12, 2007 3:00 PM
To: communitydevelopmentbanking-l@cornell.edu
Subject: Fwd: Re: New Market Tax Credits
Randall Benston <randallbenston@yahoo.com> wrote:
Date: Fri, 12 Jan 2007 11:44:09 -0800 (PST)
From: Randall Benston <randallbenston@yahoo.com>
Subject: Re: New Market Tax Credits
To: JIM MARTONE <JMARTONE@COUNTYCORP.com>
CC: communitydevelopmentbanking-l@cornell.edu
Jim - The NMTC would not be a direct benefit for you, because it is a program for organizations that are for-profit, and even if you started a for-profit subsidiary you'd have to apply for a hyper-competetive program that is funded only once a year.* So you would want to apply for a loan to an organization that has received an allocation of tax credits under NMTC with the hope that they will be more attractive in their terms, rates, and/or credit standards than other potential lenders.*
Your best bet is the Ohio Community Development Finance Fund (Finance Fund)James R. Klein, (614) 221-1114, jrklein@financefund.org* They received a NMTC allocation last year.*
You can go to http://www.cdfifund.gov/what_we_do/programs_id.asp?programID=5
on the CDFI website and see the yearly list of awardees for the each year there.
Good luck,
Randall Benston
JIM MARTONE <JMARTONE@COUNTYCORP.com> wrote:
Can someone give me a brief explanation of how a social service agency (non-profit) would benefit by using NMTC for the purchase rehab of building they want to use as their headquarters. Thank you
Jim Martone
Vice President of Housing
CountyCorp
40 West 4th Street, Suite 1600
Dayton, OH* 45402
937-225-6328
Randall Craig Benston
404-964-5458
Randall@FundingForAll.com (Randall@FundingForAll.com)
www.fundingforall.com (http://www.fundingforall.com/)
Randall Craig Benston
404-964-5458
Randall@FundingForAll.com (Randall@FundingForAll.com)
www.fundingforall.com (http://www.fundingforall.com/)
Randall Craig Benston
404-964-5458
Randall@FundingForAll.com (Randall@FundingForAll.com)
www.fundingforall.com (http://www.fundingforall.com/)
*
Randall Craig Benston
404-964-5458
Randall@FundingForAll.com (Randall@FundingForAll.com)
www.fundingforall.com (http://www.fundingforall.com)
*
This post transferred from the cdb-l mailing list