The tough times we face today because of the recession are not unfamiliar to individuals throughout Ohio. In many of Ohio’s communities, the day-to-day realities of financial stress are a constant companion. Finance Fund works with many organizations to help improve the lives of Ohioans living in distressed urban and rural areas. However, much of this work could not be done without community banks. Some wonderful examples of this work are located here.
Community banks are a valuable resource to neighborhoods and families throughout Ohio because of their investments locally. Think back to the classic film It’s a Wonderful Life where George Bailey, played by Jimmy Stewart, fights to keep his savings and loan afloat to save his community. Of course this is a Hollywood example, but it does demonstrate the basic principal of a community bank. Their local investments and interests make community banks a vital part of Ohio’s neighborhoods.
As noted by the Independent Community Bankers of America community banks “focus attention on the needs of local families, businesses and farmers.” Officers at community banks are typically involved in local community affairs and work for a small business, making their focus more community-centric. Also, because their loan decisions are made locally, they can quickly provide funding that benefits their communities. Locally, the Community Bankers Association of Ohio does great work through advocacy and support to promote the interests of the state’s community banks.
Community banks often encounter challenges in providing the financing required to fund projects. These come from providing enough financing to have a major impact in a severely disadvantaged or distressed community. Or issuing loans for projects considered marginal, either due to location in low- to moderate-income areas, lean size, lack of established credit or risk potential.
The great news for community banks is that there are programs available that bridge the financing and risk gap to bring these projects to fruition. Numerous programs and tools exist to help community banks leverage their existing funds. These include New Markets Tax Credits, linked deposit programs, predevelopment grants and economic development grants. These tools help community banks fund projects by reducing risk and allowing them to underwrite deals that promote community and business development. Finance Fund continues to partner with community banks in their efforts to serve as community champions.
If you’re a community bank looking for a partner to invest in your community, give me a call at 614.221.1114.
Tags: community banks, funding
