Maturity Linked Funding
DESCRIPTION:
- Maturity linked funding provides a lender with a source of funds for a length of time that matches the maturity of the qualifying loan.
FUNCTION:
- By providing lenders with a longer-term source of funds at a fixed rate, maturity linked funds often make longer term, fixed rate financing possible.
- In times of heavy loan demand, maturity linked funds ensure a source of available loan funds.
QUALIFICATION AND USE CRITERIA:
- The project must produce public benefits such as creating or retaining jobs.
- Loan proceeds must be used for specific eligible purposes such as fixed asset financing, working capital, etc.
- Interest rate caps may apply, usually in the form of limits on markups over the cost of the funds.
PROGRAM STRUCTURE:
- Rules pertaining to jobs created, etc. usually define funding limits.
- Maturity linked funding programs often involve an interest rate subsidy and can generally be used with other enhancements.
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