Funding Community Health Care Clinics

1. Funding Community Health Care Clinics Federal Reserve Bank of San Francisco October 2003 Scott Sporte

2. National Cooperative Bank Chartered by Act of Congress, 1978 Offices in DC, New York, Oakland Borrowers to be: Consumer cooperatives “Cooperative-like” nonprofit organizations 35% of loans to benefit low-income populations

3. NCB Development Corporation Mission: To provide solutions, based on cooperative principles, that empower under-served communities to address the problems that poverty creates in America.

4. NCB Development Corporation Affordable Housing Assisted Living & Housing with Services Education / Charter Schools Community Development Corporations Worker Owned Businesses Health Care

5. Community Health Care Borrowing organizations provide prenatal through senior care to a predominantly low-income population Community health centers Substance abuse rehab Adult day health centers Affordable assisted living

6. Health Care Lending Over $150 million to community-based health care providers since 1985 Current portfolio $60 million in 13 states, approx. 60% in California Historic losses <0.1% Average health care delinquency 0.57% at year end

7. Health Care Lending Direct loans for facilities construction, expansion and renovation; equipment and working capital Loans sized $100,000 - $5,000,000 + Fixed or floating rates priced at or below market rates Transactions on and off balance sheet

8. Partners & Programs California programs CPCA Revolving Loan Program HealthCAP Loan Program Rural Development Community Facilities programs HRSA Facilities Loan Guarantee Program New Markets Tax Credit program Secondary market capital partners

9. BPHC Loan Guarantee Program $160 million to support bank financing CHC applies to BPHC & lender of choice Section 330 CHCs only Clinic expansion, construction, renovation Guarantee of up to 80% of loan balance

10. CPCA Loan Programs $11 million capitalization ($10 million from The California Endowment, $1 million NCBDC) Designed to be highly flexible, low hassle, low cost Underwriting criteria developed with CPCA board input Focus on access to capital for all California health centers 2 week processing time, standard application, underwriting to RR 6 & 72 week processing time, standard application, underwriting to RR 6 & 7

11. CPCA Loan Programs, cont’d Four programs: Information Systems Emergency Cash Flow Facilities and Equipment Revolving Lines of Credit $14 MM committed since February 1999 $6.5 MM outstanding at 9/30/03 90 loans 45 health center corporations 1 Write Off Totaling $65,000 Valley Community Clinic. Gap funding.Valley Community Clinic. Gap funding.

12. HealthCAP Loan Program $10 million program, expanding to $14 million $1 million State of CA 1st loss guarantee Loans $250,000 - $1 million 15 year maximum term, 20 year amort 90% maximum loan-to-value Worked closely w/treasurer’s office; filling funding gap; small to medium size health facilitiesWorked closely w/treasurer’s office; filling funding gap; small to medium size health facilities

13. HealthCAP Program, cont’d Investor purchases 70% participations NCBDC retains subordinate debt on remaining balance Intend to replicate with other interested investors

14. Rural Health & Community CenterCalifornia Central Valley $6.0 million expansion of clinic serving farm worker population Capital campaign approx. $1.0 million Construction financed by NCB/DC & CDFI Equipment financed through USDA direct loan Permanent financing received 90% RD Guarantee

15. Contacting NCB & NCBDC Scott Sporte NCB Development Corporation www.ncbdc.org 1333 Broadway Suite 602 Oakland, California 94612 (510) 496-2223 ssporte@ncbdc.org