Strategy to Increase Economic Development by Providing a Source of RLFRecapitalization from the Capital Markets through the Utilization of Private Securitizations

摘要

The report is a primer on the securitization of loans and the capital markets. Itexplores the application of these principles to the economic development loans made by revolving loan funds (RLFs) sponsored by various federal and state agencies. Recommendations are made regarding enhancements that could be instituted in the RLF programs in general, and specifically regarding accessing the institutional investment market to provide recapitalization of the RLFs through the securitization of existing and future economic development loans. A plan is developed for the implementation of a securitization/recapitalization program for RLFs desiring to become less dependent on appropriations for their funding needs. In connection with the report, the EDA RLF system, in particular, was studied. However, the conclusions reached have general applicability for all RLFs involved in economic development lending.