Orange County NC Website
Browse       Search
• 9 , <br /> PROPOSED STRUCTURE <br /> Each bank participant will commit a revolving credit <br /> line on a non-recourse basis to an entity determined by appropriate legal review of the proposed <br /> structure. These credit lines will be secured by assignment of the loan receivables to such entity. <br /> A 36-month commitment period will be established during which time each financial institution <br /> will fund approved loans on a pro-rata basis. Funding procedures, to include a provision for an <br /> appropriate notice mechanism, would be established. At the end of the commitment period, to the <br /> extent there are amounts owned under the loan program, the amounts owed would be "termed" <br /> for a period of no later than the latest scheduled maturity date for loans outstanding to Borrowers <br /> under the program. The County will provide an irrevocable commitment to fund a loan loss <br /> reserve equal to 30% of the financial institutions' commitment. All financial institution <br /> participants will bear their share of any losses (70% of principal, interest, <br /> collection fees, etc.) incurred under the program. Collection procedures and loss procedures will <br /> be established. Repayment of the financial institutions' loans will be on a monthly basis and will <br /> consist of the net proceeds received from Borrowers under the program. The established entity <br /> will pay each financial institution its percentage share of those net proceeds on a monthly basis. <br /> This proposed structure may be subject to modification based upon the review and advice of <br /> appropriate counsel. <br /> LOAN LOSS RESERVE <br /> • In the first year a Loan Loss Reserve of $45,000 $50,000 (30%) must be 100% <br /> irrevocably committed by Orange County prior to implementation or activation of the <br /> Orange County Loan Program. In year two, an additional $50,000 must be committed. In <br /> year three, $55,009 $50,000 must be committed, bringing the County total to 30% of the <br /> one-half million dollar loan capacity. <br /> • Loan Loss Reserve to be provided by Orange County shall be funded in an amount not <br /> less than 30% of the aggregate loans made during the term of the program, less amounts <br /> paid from the reserve to the participating financial institutions. <br /> LOAN COMMITTEE <br /> Membership shall consist of 6 representatives from the participating financial institutions and-2 3 <br /> representatives appointed by the County Commissioners. Selection of the 6 initial members shall <br /> be made by the members of the Loan Pool Task Force, with no less than 4 members of this initial <br /> selection representing financial institutions serving on the Task Force. Appointees will serve <br /> 7 <br />