The State Bond Commission on March 20 approved a taxable loan not exceeding $5,000,000 to the Finance Authority of New Orleans (FANO) to establish a revolving loan fund to make short-term loans to local nonprofits and small businesses for resiliency and energy-independence projects.

Staff described the program as a revolving fund seeded by a loan that would be deployed into subloans averaging roughly $315,000, with maturities of two to three years and interest rates of about 6 percent; final terms would depend on project size, borrower credit and underwriting criteria. FANO said all program funds and collateral would be isolated from other FANO operations and that FANO would not be liable for defaults on the subloans.

A complicating factor noted on the record: staff said the intended source of funds is tied to the Coalition for Green Capital (CGC), which was awarded a $5 billion EPA grant in 2022, but the packet stated those CGC funds were at the time frozen in an account at Citibank and that CGC had initiated legal action to regain access. Staff said the FANO loan would only be issued if CGC regains access to the funds.

Representative Reiser moved approval of the item; Senator Lambert seconded. The commission recorded no objection and approved the item.

Nut graf: The approval authorizes FANO to stand up a short-term lending program aimed at resilience and energy upgrades for small borrowers, but deployment depends on the outcome of unrelated litigation and a bank account freeze affecting CGC funds.

Details and conditions

Staff described a two-year deployment period: if FANO receives the loan and deploys subloans over that period, any remaining funds at the end of two years would be subject to mandatory prepayment. Packet materials anticipated average subloans of about $315,000 and interest near 6 percent; final subloan pricing would be set by underwriting criteria.

Staff further noted that FANO would isolate program funds and collateral from other operations so that the authority would not be liable for defaults on the revolving subloans.

Public comment and packet materials

Staff reported one public comment from Henry Kenny was included in the meeting packet; the transcript does not quote the comment’s content. Representative Reiser moved approval; Senator Lambert seconded. No objections were recorded.

Provenance: Transcript blocks introducing item 7 and the recommendation for approval are recorded in the meeting transcript.