THE BENEFITS AND TECHNIQUES TO MAKE IT HAPPEN
The Brookings report proposes what it has dubbed direct seed funding.
“Through this program, the Treasury Department would establish and capitalize state revolving loan funds that would provide direct seed capital through a combination of low-interest, potentially forgivable debt and working equity to locally managed neighborhood investment funds.
A one-time, $2-billion capitalization of these funds would yield $80 million at 4-percent interest to loan annually without touching the principal.
A 10-percent add-on to each transaction for working equity to
support local capacity-building would consume less than 0.5 percent of the
principal balance.”
The local neighborhood investment funds would allow residents of
eligible geographic areas — together with other public, private, and nonprofit
investors — to collectively purchase and develop or redevelop land or buildings
in commercial corridors in the targeted areas.
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