The Process of an EBA Fund Transaction

Purchasing loans from EBA Fund is a simple, standardized process that can match the desired scale and pace of buyers.

EBA Fund takes the guesswork out of the purchase process with expertise on CRA, deep relationships with CDFI microlenders across the country, and an existing portfolio of CDFI originated small business loans for sale. Through a transaction with EBA Fund, banks can support CDFIs across their footprint, increase community impact, and enhance CRA performance. How does a typical purchase with EBA Fund work?

1. EBA Fund and the bank connect and discuss goals as well as the credit profile a bank may require. EBA Fund then identifies available loans in the bank’s footprint to determine if a transaction is possible. Because CDFIs lend to businesses outside a bank’s typical credit box, EBA Fund encourages banks to size their credit box in light of the total capital at risk. Well-seasoned loans are often available.
2. EBA Fund sends legal documents for the bank to review. EBA Fund has standard legal documents to make transactions easier. A nonrecourse master participation agreement governs the initial CDFI purchase. EBA fund then transfers its interest to the bank with an assignment agreement.
3. The bank and EBA Fund review available loans using a loan tape with key risk variables. Some examples of key risk variables are industry, time in business, and credit score. After loans are narrowed, key documents for each loan are provided to review in EBA Fund’s online portal, LoanWell. If a bank is purchasing loans from multiple CDFI partners, this documentation may look different but always includes closing documents and the credit memo used during origination. EBA Fund prioritizes trust, transparency, and data security. LoanWell provides a secure data room to share sensitive information.
4. EBA Fund confirms the final portfolio and prepares all documents. Price is determined by geography and availability. EBA Fund and the bank set a closing date. EBA Fund also requests a concurrent grant to support new lending at the CDFI partners.
5. After the purchase is complete, EBA Fund sends formal acknowledgement letters for CRA qualification information for both the loan purchase and grant request to use in the banks CRA evaluation.
6. EBA Fund provides monthly transaction reports and a single transfer of all payments each month.

EBA Fund is prepared to meet the pace of bank buyers interested in purchased microloans. A typical transaction takes between 3-6 weeks, but our streamlined process can take as little as five business days depending on loan availability. One transaction with EBA Fund can support entrepreneurs across your footprint. Are you ready to simplify your CRA impact??

If you're interested in partnering with EBA Fund to purchase loans and support CDFIs in your area, please reach out to?Chelsea Probus. Learn more about EBA Fund?here.?