Why Should a Lender Partner with AOC?
In the Portland Metropolitan Area, AOC specializes in providing targeted borrowers with access to capital by linking them to other local lenders. We assist and partner with lenders that share our goal of creating a healthy sustainable community by promoting economic revitalization for disadvantaged groups.
Benefits to our participating lending partners include:
- Enhanced ability of lender partners to make loans that they could not otherwise make by AOC sharing risk.
- Increased CRA compliance opportunities.
- Enabling more capital to flow into our community and businesses by pooling resources and leveraging capital. AOC will fund up to 100% of a loan up to our current loan limits.
- In addition to standard business loans, AOC can provide loan guarantees, equity loans, and other credit enhancement options through its lending partners.
- Opportunity for lenders to enhance services offered to its current customers.
- Actively market partner loan programs to other prospective borrowers and future customers.
- Directly benefit the underserved and under-banked businesses by providing access to loans.
- Loan products specific to business needs.
- Seamless product delivery despite involvement of multiple lenders.
- Capacity building serving targeted CRA sectors through peer-to-peer learning & information exchange.
- Access to AOC’s robust Business Advisory Services program.
- Provide greater access to financing over the long term by building a network of lenders who are committed, and who have the expertise, to serve these businesses.
How Does the Lender Partnership Work?
We deliver our loan participation products to borrowers via a network of lending partners whose priorities align with ours. Both organizations hold an interest in the loan on their balance sheets in the form of loans and are legally classified as direct co-lenders.
AOC and the lending partner negotiate a participation agreement that specifies the parameters and roles of the inter-creditor relationship and defines how loans will be co-funded, risk shared, and fees split.
The amount of funding and risk sharing in participation depends on the circumstances of each transaction and needs of participating capital sources. We can lend on a pari-passu basis, meaning we match loan structure, pricing, collateral and other terms and conditions with our lending partners, or we can make loans based on a variety of other loan structures. Because of our funding, and the goals of our investors, we are flexible in what we are willing to do.
We bring capital and a degree of specialized knowledge of our target market sectors to our lending partnerships. We also provide ongoing one-on-one technical assistance to our borrowers. The borrower receives a single loan from our lending partner. Our lending partners contribute local lending expertise, serve as the primary underwriter and borrower relationship manager, monitor borrower’s activity, and service the loans on behalf of the parties.