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