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Agency Loan Fund

The Agency Loan Fund (ALF)

The unique FJC Agency Loan Fund (ALF) provides secured loans to credit qualified charitable organizations in furtherance of their charitable missions. Often these organizations have limited access to other credit sources. The loans are made at a floating interest rate of the prime rate plus three percent. There are generally no fees to the borrower or pre-payment penalties.

The loans are frequently made to provide bridge financing for agencies awaiting government and other funding and to address short-term needs. Some of the loans have helped finance the establishment of group homes for the disabled, classes for special needs children, programs at community centers for the aged, adult literacy programs, the purchase of public radio and television stations, and capital projects.

Charitable organizations wishing to be considered for a loan begin the process by submitting an FJC Loan Application together with certain financial and other information about the organization. Decisions about whether to approve an ALF Loan are made by FJC’s senior management and approved by FJC’s Board of Directors. The process begins with the potential borrower’s submission of FJC’s standard loan application. FJC then generally meets with the borrower’s representatives to review the application, including the organization’s mission, financial statements, staff and board of directors, and description of available collateral, and to discuss the structure of the potential loan. Applicants must be able to demonstrate that:

  • The cost and viability of the project are logical and achievable;
  • The applicant can both pay the loan’s debt service and maintain operations;
  • The loan can be repaid in full from sources other than fundraising or a capital campaign;
  • The applicant has in-house or outside expertise to manage the project.

 The ALF is offered as an investment option to FJC’s donors. The net return on the ALF is credited to FJC accounts that select this investment option and will ultimately be directed through donor recommended grants to worthwhile charitable organizations. The return varies with changes in market interest rates and utilization ratios.

The interest earned by the ALF is credited to the donors’ accounts, thereby increasing the funds available for grants. FJC manages the liquidity of the ALF to ensure that accounts invested in the ALF are available for grants at any time.