Dear Potential Subscriber/Board Member/Investor,
AND Direct, LLC in partnership with NLEH, Inc. (a nonprofit) is sponsoring the charter of Greater Cleveland Cooperative Federal Credit Union, by raising the initial funds to develop and submit a “Private Placement Memorandum” (“The Offering”) [see Fig. 1]. “The Offering” will subsequently raise a minimum of $5M from the secondary market, to be committed to the Greater Cleveland Cooperative Federal Credit Union in sponsorship of its charter as our investment partner and depository institution [see Fig. 2]. “The Offering” will be constructed and organized by the consultant firm Regulation D Resources(™) with AND Direct as a Small Business Investment Company (“Impact SBIC“) applicant. An “Impact SBIC” makes early-stage investments (equity or debt) in small businesses, specifically in low-income and underserved areas. This set up gives us SBA (Small Business Administration) immediate loan guarantees and 3-1 leverage on investment funds. The Greater Cleveland Cooperative Federal Credit Union (partner and depository institution) will later multiply that initial $5MM by 9 as a low interest 90% LTV refinance loan, which also lowers our cost of funds ratio. [see Fig. 3].
AND Direct is a designated Community Development Entity (CDE), that has extensive expertise and experience in small business development and financing as well as portfolio management, such that we can mitigate unsystematic and default risk. Additionally, NLEH, Inc. and its member cooperatives will serve as business developers to portfolio companies and its respective Executive Directors collectively, will serve as an “Advisory Board” to AND Direct for investment strategy and lending policy development.
This partnership ensures that our investments, in addition to being risk-mitigated and investment-grade, remain mission-driven, thus achieving the community and economic development requirements of the credit union as a Community Development Financial Institution (CDFI) and AND Direct as an Impact SBIC when making initial and future investment decisions and developing lending policies.
Summary of Purpose and Use of Funds:
We will apply monies raised through this pre-development offering to do 3 things;
- Pay all expenses involved with developing “AND Direct’s ‘Impact SBIC’ organizational requirements and application.”
- Pay all expenses involved with developing the organizational requirements of the “Credit Union’s Charter Application and Commitments” as well as its brick and mortar establishment.
- Pay all expenses in the development and marketing of the “Private Placement Memorandum.”
The resulting “Structure“ of the Private Placement allows us to mitigate default risk through SBA guarantees. The structure also mitigates unsystematic risk through the sponsored lending institution’s ability to increase the investment funds available through a loan (scale). More investment funds allow for an increased diversification of the portfolio (scope).
We are seeking pre-development investments from “accredited” (unlimited) or “non accredited” investors (limited to 35) to finance the development and execution of a Private Placement Memorandum, which we will use to raise secondary market funds to pay off our pre-development investors. The fundraising goal is $150,000. The investment type is debt, secured by a Promissory Note and Investor Services Agreement.
Expected Investor Return
AND Direct, LLC will make monthly interest-only payments @ 15%.
Example Minimum Investment ($5,000). Investor will receive $750/mo and $10,000 at end of 12-month term.
Thank you for your interest
Arlin J. Wallace
Chief Executive Manager
AND Direct, LLC
If you need or prefer financing for this investment, we can arrange business lines of credit to accomplish the transaction. Go HERE.
If interested and have a net worth equal to or more than $1MM, please contact us HERE (with “Investments” in the Subject box) and a sales associate will handle the transaction.