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Terms for Social Investment Loans

Terms for Social Investment Loans

The Equity Trust Fund welcomes loans from individuals and organizations that wish to make an investment with positive social impact. Lenders may set the terms of their loans within the guidelines established by the Fund, and may even indicate preferences regarding the use of their funds.

Amount: The minimum amount for an Equity Trust Fund loan is $1,000. There is no maximum amount.

Term: We request commitments of at least one year.  Longer terms are preferred, because most borrowers require longer commitments from the Fund. At the end of the term, the loan will be repaid or it can be rolled over at your discretion.

Rate: You can choose the interest rate on your loan, from no interest to a maximum based on the term (number of years) of the loan. Investors receive a fixed-rate annual simple interest return of up to 1% for loans of one year and increasing 0.25% for each additional year of commitment up to 2% for loans made for a term of five or more years. When setting the rate, we ask only that you consider the needs of our borrowers as you consider your own. Many of our lenders choose rates below these maximums.

Interest payments:  Interest is paid annually and may be added to principal. Interest paid is reported to the IRS and will be taxed by state and federal governments.

Risk: Social investment loans are unsecured investments. They are not insured by the FDIC, nor by any other governmental or private entity, nor are they collateralized through secured interests in any property of Equity Trust. While the Equity Trust Fund has never lost any lender’s funds, past performance is no guarantee of future performance. Investments with the Equity Trust Fund cannot be redeemed before their due date and there is no market to sell or trade them before maturity.

Risk management: Funds from all our lenders, now numbering more than 70 individuals and organizations, are pooled, so that risk is shared; an investor’s funds will not be dedicated to any single project or sector. In addition, investments in the Equity Trust Fund are protected by our equity reserves and our excellent history of repayment from borrowers. In over 25 years of operation, the Equity Trust Fund has never failed to make repayment to our lenders.

Making a loan: If you would like to make a loan to the Equity Trust Fund, please download and fill out our loan offer form and return it to us by mail or email. If you prefer, or if you have questions, you can call us at 413-256-6161 to discuss details of your loan offer. Either way, once we have your information and the terms of your offer,  we will draw up and send to you two copies of a Loan Agreement outlining these terms.  If they accurately reflect your intentions, you’ll sign both copies, keep one for your own records, and return the other to our office along with your check for your Equity Trust loan. When we receive the check, we’ll then send you a Promissory Note evidencing our receipt of your funds.