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investment in a City- operated program makes a total $50,000 available to businesses, where as <br />$50,000 in the TCCCF opens up to $500,000 for every individual deal. For example, under <br />City's former program, $50,000 could make two, $25,000; while with a membership in TCCCF, <br />the same $50,000 could achieve an infinite number of loans up to $500,000. <br />4.4 Membership in the Fund would allow the City to provide access to capital for small businesses <br />without the need to act as a banker. Fund staff work with the loan applicants and their lenders to <br />determine if they qualify a Fund loan, and then complete all loan document preparation and <br />closing activities. Upon closing of the loan, the Fund sells the loan to the Community <br />Reinvestment Fund, which packages these loans together with other community development <br />loans for resale as an asset - backed security. <br />4.5 Membership in TCCCF runs a lower financial risk to the City than other types of small business <br />programs. Under the City's former program, each loan issued with the City's participation <br />brought along a potential loss of its principal if the borrower defaulted on the loan as the City <br />carried the loan during the entire repayment period. Membership in TCCCF eliminates the risk <br />to the city of losing its principle investment by immediately selling the loan to the Community <br />Reinvestment Fund for resale on the secondary market. <br />5. REQUESTED COUNCIL ACTION <br />5.1 Discuss possible enrollment into the Twin Cities Community Capital Fund. <br />Attachments: A. Background materials <br />B. List of members cities <br />Prepared by: Jamie Radel, Economic Development Associate <br />Page 3 of 3 <br />