Loan Sales and Securitization
for Revolving Loan Funds

Demonstration Project Final Report

Prepared by Scott Reznick
Commonwealth Development Associates, Inc.

7A West 82nd Street
Harvey Cedars, NJ 08008
609.361.7639 fax 609.361.7638
sreznick@ix.netcom.com

April 30, 2001

Submitted to the Economic Development Administration,
U.S. Department of Commerce

This publication was prepared by Commonwealth Development Associates, Inc. The statements, findings, conclusions, and recommendations are those of the authors and do not necessarily reflect the views of the Economic Development Administration.

ACKNOWLEDGMENTS

EXECUTIVE SUMMARY

I. EDA's DEMONSTRATION SECURITIZATION of RLF LOANS

II. SECURITIZATION

III. RLF SECURITIZATION

IV. NADO/CDA OUTREACH and EDUCATION

V. RLF REQUIREMENTS for BUSINESS DEVELOPMENT SECURITIES

VI. NADO/CDA PROJECT EVALUATION SURVEY

VII. INVESTOR REQUIREMENTS for BDS

VIII. CREDIT QUALITY of RLF LOANS

IX. CDA's BUSINESS DEVELOPMENT SECURITIES

X. CDA's TRANSACTION PROCESS

XI. CDA's LOAN SELECTION STANDARDS

XII. CDA's DUE DILIGENCE

XIII. RLF REPRESENTATIONS and WARRANTIES

XIV. CDA's LOAN PRICING MODEL

XV. SAMPLE RLF LOAN PORTFOLIOS

XVI. RECOMMENDATIONS

APPENDICES

A. RLF OUTREACH and EDUCATION CHRONOLOGY

B. SAMPLE RLF OUTREACH and EDUCATION DOCUMENTS

C. EVALUATION SURVEY on EDA RLF SECURITIZATION PROJECT