The Vermont Community Loan Fund is a unique, socially-responsible investment vehicle. We give Vermonters and out-of-state friends the opportunity to put their money to work right here in our towns and villages, building homes and supporting the local businesses and community organizations that make Vermont so special.

The Loan Fund is committed to ensuring that all Vermonters have access to the capital they need to succeed. Guided by our mission, we often lend to borrowers who might not be traditionally "bankable" (a start-up business, problems with a borrower’s poor or incomplete credit history, etc.). We mitigate this risk by being much more engaged with our borrowers than a traditional lender: from day one, we’re regularly in touch, making sure they have the technical assistance and support they need, both keeping their business or project financially sound and ensuring a healthy, productive lending relationship for the Fund.

While we’re a Community Development Financial Institution (CDFI), certified and monitored by the US Department of Treasury, with 20 years of fiscal responsibility and successful growth, investments into the Vermont Community Loan Fund are not FDIC-insured.

However, this does not mean that our investors’ funds are unsecured.

We have implemented internal safeguards to mitigate the risk in our lending portfolio and self-insure our investors’ money. These include:

Secured Loans

Like a traditional lender, we secure every loan that we make with real property and/or personal assets. Even in the case of a higher-risk project, this collateral limits or eliminates any potential loss to the Fund.

Our Permanent Equity

VCLF has just over $5 million in endowed equity, money that has been permanently granted to VCLF to lend out as capital and provide a safeguard for invested money. Currently, our equity represents 24% of our total assets, much higher in comparison to commercial banks at 4% and even credit unions at up to 10%. This equity acts like the foundation of the Loan Fund and would be the first money impacted in the event of any loss.

Our On-hand Cash Reserve

We currently keep just under $2 million available in cash reserves to cover loan losses and/or liquidity needs. Representing almost 10% of our total assets, this cash reserve provides investors with a buffer against negative external impacts on the organization, such as a downturn in the economy.

"Active Lending"

VCLF prides itself on the high-quality technical assistance and support we provide to our borrowers. A statewide leader in affordable housing and business development for over 20 years now, we work with our borrowers every step of the way, making sure that everything stays on an even keel and that we’re available and ready to help out if need be. Results prove that this “active lending” creates healthier borrowers with successful projects, all the while protecting our loan and our investors’ money.

The Loan Fund has never lost a cent of our investors’ money.

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