Partnerships with community organizations, non-bank financial organizations, consortia, and government can achieve what banks and thrifts alone cannot. In the housing area, for example, community-based organizations access funds from public and private sources to replace missing capital that can augment a buyer's down payment or reduce monthly payments. One recent example from Salt Lake City illustrates how the process can work. A bank provided loans to a local non-profit organization that develops and rehabilitates affordable housing in the city. Stronger neighborhoods are good for the community and good for the banks because they create a safe and sound lending environment in which lending opportunities abound.
Partnerships are equally important in revitalizing commercial business districts.
Commercial development and revitalization projects often depend on three levels of capital to succeed - equity capital, mezzanine financing, and senior debt. Bank loans can provide the senior debt - but a community development project normally will not be viable with bank debt alone. This is where partnerships are critical in providing equity capital or mezzanine financing. The Small Business Investment Corporation or SBIC program is one vehicle for raising equity capital. Consortia often provide mezzanine financing.