Why does MMT seek security for loans?
Topics: PRI
Seeking collateral, when possible, is a guiding principle in prudent
lending and in accordance with our value of stewardship. While
obtaining collateral is a tool in our due diligence, we also recognize
external factors can negatively affect repayment and unexpected borrower
problems may emerge. In such cases, MMT works with organizations to
develop a reasonable repayment plan. We do not aggressively seek to
foreclose on the loan to the harm of the nonprofit.
Does MMT offer PRIs to government agencies?
Generally, no. Financing of public sector projects is best fitted to government agency budgets and taxpayers in communities served by those agencies.
Are we required to provide audited financial statements?
Topics: PRI
No. That said, independent audited statements provide MMT with assurance that an organization's finances are presented fairly in all material respects. Should we request a full proposal from your organization, we will request current year financial statements (balance sheet and income statement) and financial statements for the three prior years. For prior years' statements, audited statements are preferred, if available.
Is there an origination fee for a PRI loan?
Topics: PRI
No. However, you will likely incur legal costs for your attorney to
review the loan documents. In most cases, nonprofits receive probono
legal advice through their board or other sources, which should result
in minimal or no out-of-pocket legal expenses.When real property (i.e., land, buildings) is secured, the applicant typically pays expenses for title search, lender's title insurance policy and recording/filing of the deed of trust. When personal property is secured (i.e., equipment, other assets), the applicant typically pays the UCC (Uniform Commercial Code) filing fee.
Can I propose a lower interest rate?
Topics: PRI
Generally, no. MMT has established a set rate to be fair and consistent with all applicants. That said, if you have compelling circumstances that require a lower rate, describe them in the Initial Inquiry and we will consider your request.
If awarded a PRI, is the PRI agreement different than MMT's grant agreement?
Topics: PRI
Yes. There is a promissory note. The covenants are typical of what you would see in commercial promissory notes, as well as requirements for the agency to maintain administrative, program and fiscal stability, among others. In addition, the borrower will submit a certificate of commercial insurance and corporate resolution and closing certificate authorizing the loan. Should we request a full proposal from your organization, we would discuss these requirements as part of our due diligence.
May we present a PRI with options for the amount, interest rate and repayment terms?
Topics: PRI
Yes. Our experience indicates that proposals that identify a specific amount, interest rate, timeframe and repayment strategies have undergone more rigorous planning within an organization.
May we apply for an "emergency" cash-flow loan for delayed receivables?
Topics: PRI
We are open to receiving an application. However, a PRI may not be the best fit for your particular situation. We suggest you contact us before submitting an inquiry in a case like this.
We have other loans. Would this count against us?
Topics: PRI
Generally, no. We would examine your ability to repay your current debt
and the additional PRI debt. In particular, we would determine whether
taking on the PRI has the potential of weakening your financial
condition.Prior to submitting a written inquiry, you should inform your lenders about the MMT application to ensure you will be complying with their loan covenants.
The project for which we are seeking a PRI has other lenders. Would this count against us?
Topics: PRI
Generally, no. In fact, your proposal may be stronger. Prior to
submitting a written inquiry, you should inform the other lenders about
your MMT application to ensure you will be complying with their loan
covenants.
If awarded a PRI, when would we receive payment?
Topics: PRI
Depending on the PRI, disbursement may take up to two months after the
award date due to the time involved to prepare loan documents.
How can we get more information about the PRI program?
Topics: PRI
Program Officer Paul Reich is primarily responsible for the analysis of
PRI funding requests. Although you need not vet a PRI proposal before
submitting a letter of inquiry, you are welcome to contact him if you
have questions about the PRI program: by email at paul [at] mmt [dot] org or by
phone at 503-228-5512.
What happens when we submit an Initial Inquiry for a PRI to MMT?
Topics: PRI
All initial inquiries that come in by the 15th of each month are batched together and reviewed by the program officers, who identify questions, strengths, concerns, etc. of each proposal. Summaries of the proposals written by program officers go to the trustees at their next month's meeting, where they decide which applications will be investigated further. Applicants are notified of the decision right away. Applicants whose inquiries move to further study are invited to submit a full proposal. They generally have three weeks from the date of notification to do so.
Is there a separate application form to apply for a PRI?
Topics: PRI
We currently use one form to elicit information about Responsive Grants and PRI requests. If you are seeking a PRI, please be sure to include the following information in your Initial Inquiry:PRI amountMMT interest rateProposed repayment terms noting timing of payments of principal and interestSecuritization opportunitiesRepayment strategies (preferably primary and secondary strategies). If repayment includes future grants, points of contact (name, email address, phone number) should be identified.
May we seek both grant and PRI funding in the same proposal?
Topics: PRI
Yes. The Meyer Trust has issued PRI and grant funding simultaneously to
support a project. When completing your Initial Inquiry, be sure to
include information regarding the size, terms, and repayment strategy
for the PRI you are requesting in addition to indicating the amount
requested in the form of a grant.
What are the terms of PRIs?
Topics: PRI
The Meyer Trust adapts its PRI program terms to suit each transaction funded. The following represents the range of terms for Meyer Trust PRI investments, which to date have taken the form of loans:
Do you award a PRI with multiple payments?
Topics: PRI
Typically, no. To keep our administrative expenses at a minimum, MMT prefers to disburse PRI funds in one lump sum.
We are considering applying for a PRI that is not within the $100,000 to $500,000 range of most of MMT's PRIs. Would that count against us?
Topics: PRI
If you are considering applying for a PRI outside the range of most of our PRIs, that generally won't count against you. We suggest you contact us (link to Paul) before submitting your inquiry.
