TITLE
Recommendation to authorize City Manager to prepare and execute agreements to sell loans from commercial and industrial lending programs, as may be required from time to time, to replenish the capitalization and lending capacity of these programs, following approval as to form by City Attorney; and
Authorize City Manager to prepare and execute participation agreements and purchase options with other lenders to leverage the lending capacity of the programs, following approval as to form by City Attorney. (Citywide)
DISCUSSION
Approval is recommended to authorize the City Manager to sell loans and enter into participation and purchase options with other lenders as part of the City’s commercial and industrial lending programs.
In 1987 the City Council authorized. the establishment of the Commercial and Industrial Revolving Loan Fund Program (Loan Program), which is administered by the Economic Development Bureau in the Community Development Department. The purpose of the Loan Program is to provide access to capital to retain, attract, expand and create businesses in Long Beach. Financing under the Program supplements, but does not replace, private lending. Since its inception, more than 300 loans have been funded, totaling more than $22 million. Loans exceeding $1 00,000 require authorization by the City Council.
Sales and Participation agreements will provide a method to replenish the capitalization and leverage the lending capacity of the Loan Program. As loans are made in the Loan Program, funds available for lending from the initial capitalization are diminished. To sustain the impact of the commercial and industrial lending programs, it is recommended that authorization be given to sell selected loans to maintain a desired capitalization for lending.
Loans may be sold at par or discounted value. The price of individual loans will depend on the term, rate, nature and performance of the loan, as well as current market conditions. In selling selective...
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