Financing for Human Service Provider Organizations


MCM’s Simplified Bond Program is the easiest way for a governmental, or a not-for-profit, social service provider to borrow tax-exempt money for major capital improvements. The Simplified Bond Program was designed specifically for the needs of community based social service providers or "Agencies".

The Simplified Bond Program provides low-cost, long-term financing through the use of tax-exempt municipal bonds. Generally the use of municipal bonds will provide a borrower with savings of 20 to 30% on the interest portion of the loan, when compared to a comparable term bank loan. The savings generated can be put back into services. MCM offers both fixed-rate and variable-rate financing, but in most cases we suggest fixed-rate financing for non-profit organizations. Banks typically offer variable-rate loans or loans with an interest rate "reset" at some point which exposes the non-profit to substantial economic risk.

Issuance costs are low due to standardized loan documents and when possible, pooling of loans for economies of scale.

To qualify all borrowers must:

• Have prepared audited financial statements

• Be legally organized as certified by the borrower’s attorney

• Be qualified as a 501(c)(3) tax-exempt organization or unit of government under state law

• Meet certain credit-worthiness requirements which are based on the size of the organization and the funding source

• Be financing a project for the mission of the agency that does not benefit any individual or any for-profit business

• Purchase property at appraised value or less