The Making Of A Loan Decision

We at the NNDF look at a number of things when we make a decision to fund a loan application or not to fund a loan application. These things are generally called the C’s of credit.  Each “C” is weighted differently depending on the circumstances, however as a rule of thumb, all are taken into consideration and the stronger you are at each point the more likely the applicant will be successful at receiving funding.

Many lending institutions call them the 5 C’s of credit. They are: Credit History (character), Capacity, Collateral, Capital and Conditions.

Due to the unique nature of our region and history, we have narrowed this process down to what we call the 3 C’s. They are: Character, Capital/Collateral and Cash Flow (Capacity).

  • Character: This is just what it sounds like. This is not always a simple monetary calculation although much of the weight of the character portion of a credit analysis can come from a credit report and time on a job or time a person has owned a business. However, there are some other questions we will take into consideration that will help us reach an assessment of a borrower for this portion of the decision. Some other considerations that my help us assess the honesty and reliability to pay a debt may be:
    • How have they used credit cards or other forms of high cost financing? Do they understand the costs and are they willing to change behavior if it will help them? (They are asking us to make a financial commitment to them, are they willing to make behavioral changes for us?)
    • Do they pay their bills on time? We will often ask other lenders to see if the potential borrower is timely.  Then, unlike outside institutions, we will usually weigh some extenuating circumstances.  Was there a wildfire? Flooding? Medical issues?
    • Have they been at the same job or owned their business for a long period of time? Occasionally, we can look at an applicant and see that they have been in business for quite a long time and had one “bad year” and can show a good explanation for that down year. Things happen… But do they “happen a lot?”
    • Often this is a place where NNDF has provided some financial education or coaching. We have many applicants who have never been taught the importance of establishing and maintaining a good credit history.  If they have not, we then look at the applicant/client and ask if they are willing to learn that importance and do the things they need to do to begin to build good credit “character.”
  • Capital/Collateral: This is often a portion that is the weakest with our borrowers. However, it is also an area in which we can work with the applicant. Historically asset creation has been difficult in Indian country due to various reasons that are not always the fault of our borrowers. However, we still have our loan policies to guide us and those policies dictate that we have security for our loans. The security, or assets or collateral, generally need to match the amount of capital that is sought for the length of time it is sought.  For instance; will the collateral’s value last the entire term of a loan. It would not be fair to NNDF or the borrower to lend money on security that will have lost all or most of its fair market value before the end of the term of the loan thus leaving the borrower to be paying on something after it has reached the end of its life span. Some questions about capital/collateral are;
    • What property do you own that can secure a loan?
    • Is there a savings account?
    • Equipment?
    • Accounts Recievable?
    • And finally, if they have the requisite number of months at the same job we can use payroll deductions as a form of collateral for smaller loans.


  • Cash Flow (Capacity): Now that we know the borrower has good credit history or “good financial character” and we have a reasonable sense of collateral the next question is “can the borrower repay the debt.” Often borrowers believe if they just had $X.XX of dollars more they can “fix” their situation. However, that is not always the case. Because the new NNDF debt could, in the long run, place the borrower in a worse cash flow position than when they first came to us. We also must look at whether the borrower will be able to stay in their position long enough to actually “service” (make the required payments on) the new debt.

Generally, this is a mathematical question.  Some questions we will ask of the borrower are:

  • Is your job steady? Or is your business going to last long enough to service the debt? There have been times we have made smaller loans with much shorter terms or (balloon) payments that match their job or contract. And of course, if it is a contract then the contract obviously had to be more than enough to service the debt obligation.
  • How many other loan obligations do they have? This is another issue that many borrowers overlook or upon which they do not place enough value. If an applicant has many loan obligations already and we are simply adding to the list we have to know that the addition of our loan obligation will significantly improve their ability to service their other obligations as well as ours. We would not be helping them (or us) if we have placed the borrower in a position to not be able to pay all their obligations.
  • What are their current living expenses? Even for a business loan decision we must look at the applicant’s current living expenses. If their living expenses cause too much of a drain from the business at what point are they forced to make decisions between paying business debts or maintaining a particular lifestyle? Often times this is another point of education for a client. Owning a business, or taking on a personal loan, often requires difficult life choices. “Can I keep doing some of the extra-curricular things I enjoy if my monthly income is diminished by these new loan obligations?”

Most lending institutions will require that their applicants meet or exceed all the needs of the 3 C’s.  We at the NNDF serve a much different market. Often, we can work with a borrower if they fall short in one of these points IF we can see that the other two items are solid, AND they are willing to take the necessary steps to overcome that one bad credit factor.  If we must overlook two or more credit points, then the loan becomes increasingly difficult if not almost impossible.

PO Box 154 – Coulee Dam WA 99116 – (509) 633-9940

Download a copy of this process by clicking this link: Making A Loan Decision

Order Up! Video

Major National Bank Recognizes NNDF and NNDF Client

Order Up!

Wells Fargo Bank Produces A Video Journal

Be sure to check out THIS wonderful video produced by one of NNDF’s partners, (Wells Fargo Bank) regarding one of our Native clients.

The story chronicles the path of Theresa Desautel as she became an entrepreneur on the Colville Indian Reservation and how the Northwest Native Development Fund has worked to help her finance, grow and sustain her enterprise.

The story also highlights the working relationship that the NNDF has with Wells Fargo Bank and how important it is to have good partners as we continue to grow our efforts

It is important on a day like today (Giving Tuesday) to show stories like this. The Northwest Native Development Fund is a non-profit Community Development Financial Institution. We work to bring financing into some of the most difficult regions of the Pacific Northwest. We take chances where other for-profit organizations cannot. We are truly thankful for the support we receive from organizations like Wells Fargo Bank and other.

Please take a moment to watch the video and if you believe that this is the kind of work that you can support then take another moment to make a tax deductible donation to the NNDF here or


NW Area Foundation Publishes Profile on NNDF

Theresa Desatuel Owner, Red Willow Cafe’

The Northwest Native Development Fund would like to sincerely thank the NW Area Foundation (NWAF) for believing in us and being such a wonderful sponsor for the last 5 years. Recently the NWAF came out to visit “The Little Loan Fund That Could” and interviewed some of our wonderful clients and staff. The result was this heartwarming story and picture profile.

It does our heart good to know that we can play even a very small role in helping these Native entrepreneurs. And of course there are so many other great stories here at the NNDF and no one can cover them all.

We need to thank all our entrepreneurs, clients, staff, Board members. There are so many people who pull together to make things happen that it could literally be a book or full featured movie.

See the full NW Area Foundation story HERE and be sure to like us on Facebook HERE to see future updates and press releases.

NNDF Receives $745,500 Grant;


September 20, 2017

US Treasury Awards $745,500 to Leverage NNDF Funds For Small Business Financing

Coulee Dam, Washington– This week, the U.S. Treasury Department awarded the nonprofit Northwest Native Development Fund, $745,500.  The grant award is funded from the Native American CDFI Assistance program, for certified Native Community Development Financial Institutions (Native CDFIs).

“The NNDF has received 7 NACA awards since 2009 and were certified in 2011,” said Ted Piccolo, NNDF Executive Director.  “These federal resources will go a long way to helping the NNDF expand our financing activities in Indian Country. With our focus on small business lending these funds will bring more dollars to the region.”

Out of 32 applications, 20 CDFI loan funds across the nation received NACA Financial Assistance Awards, totaling $12,964,998 to awardees in 15 states. The CDFI Fund reported that, including the Technical Assistance Awardees, a total of 33 loan funds, 1 credit union, and 4 sponsoring entities were awarded a total of $15,613,767.

“This is such a great accomplishment for the NDNF,” said Piccolo.  “This award will be leveraged with other funding sources to bring over a million more dollars in capital to address small businesses in 2018”.

This U.S. Treasury Grant award will leverage with other funds to boost the NNDF small business lending funds by over one million dollars. Currently the NNDF has almost $2 million dollars in it’s small business loan portfolio and this award will help build the portfolio to over $3 million.

The Northwest Native Development Fund seeks to foster economic and financial independence for Native people by assisting in the development of personal assets through financial and entrepreneurial education as well as providing access to capital through creative lending products. For more information on the NNDF, go to or call (509) 633-9940.



Harwood’s Bunkhouse Hotel: Success on the Divide

Dateline, Jackson Montana

The Bunkhouse Hotel, located a short drive from the mountains nestled between the continental divide trail, ski resorts, and a number of natural hot springs makes the perfect getaway for any traveler seeking solitude and relaxation. Previously the hotel served as the International Order of Odd Fellows Lodge (IOOF Hall). It served the fraternal organizations for many years until the Lodge disbanded near the turn of the century.

Visiting the hotel now it is easy to understand the vision Rick Harwood had when he decided to take on this project, however local and national banks did not share the vision and the project nearly missed being grounded on take-off.Harwood, a Montana Native American who lives in Eastern Washington, ran into some unfortunate circumstances a few years earlier. As a result Mr. Harwood’s credit had taken a terrible hit and there was little to no chance that funding would be available. That was until Rick contacted Northwest Native Development Fund. Ted Piccolo, Executive Director of NNDF, saw the potential and felt compelled to see this project through.

Rick Harwood, Owner and Operator of the Bunkhouse Hotel, purchased the building on Valentine’s Day 2015 in the quiet town of Jackson, MT, population 29. At the time the soon-to-be hotel had seen better days, standing as merely a “shell” with no pluming heating system or walls of any kind. Harwood saw potential, and after a few favors and putting in hours hammer to nail, the Bunkhouse Hotel opened in May 2015. Today, the Bunkhouse is a fully licensed hotel, eatery, tavern, laundromat, and even houses the town’s U.S. Post Office in the front lobby. Guests are invited to stay and enjoy the relaxed atmosphere of an old-west era boutique with authentic cowboy décor and ambience, all while taking in the breathtaking scenery surrounding the hotel in the Big Hole Valley of Montana. The main floor provides a relaxing living area and multiple adorable single bed private rooms as well as a full laundry area and private bathrooms. Upstairs you will find the perfect group setting for any retreat, or an opportunity to meet a new friend in the “Bunkhouse” lodging area; a large room with multiple beds, a living area with a large screen television and private bar, the ultimate group lodge.

Since working with NNDF, Rick was able to rebuild his credit nearly 100 points and reestablish his historically good credit. The Bunkhouse Hotel and Rick Harwood serve as a paradigm to the success the Native CDFI industry works towards every day. The diamond in the rough, the unfunded vision, and the development fund that believes misfortune can be turned into success with the right amount of work and guidance and some help from “the little loan fund that could.”

Plateau Native Art Show!!


Mark you calendars for the 3r Annual Plateau Native Art Show in Grand Coulee Dam Washington. A huge array of Native Artists will be in attendance.

This event grows more and more every year. This year we are expecting upwards of 20 artists. There will be food vendors and entertainment.

When: 8am-6pm, Saturday September 2nd

Where: North Dam Park, Grand Coulee Dam WA.

Contact: If you would like to show/sell your art at the show contact Cassandra at

This event is made possible with generous support of the First People’s Fund.

CDFI Training For Financial Officers/Grant Mgt/Accountants


Join us in Portland!

We will be hosting Finance Reporting & Grant Tracking Workshop on July 12-13 at the Red Lion Hotel on the River Jantzen Beach

Room blocks are available while spaces last. Reserve before June 9th and registration is FREE! Registration after June 9th will cost $220.00

Rooms are available in our room block before June 14th for $179.00 per night.

Join your industry comrades for this 2-day training where we will uncover the secrets of budgeting for non-profits, financial reporting, and steps to success for keeping your non-profit books in order.

If you have questions or would like to reserve your spot, email

The room block rate will stay at $179 +tax until June 14th, just mention “CDFI training”.

Both the room block, and workshop will be located at the Red Lion Hotel, 909 N Hayden Island Dr, Portland, OR 97217. You can reserve your room under the room block rate HERE or by calling the hotel directly at (503)283-4466 and ask for the CDFI Training.

Reserve through the Red Lion
WEBSITE by June 14th to receive the discounted room rate and after you reserve your room be sure that Chris (  or Cassandra ( have your name down as an RSVP in order to attend the workshop for free.

DRAFT AGENDAInstagram-Image

Come and join other Native CDFI accountants, grant managers and financial management professionals. In this two day workshop we will share how the NNDF has managed multiple income streams, grant cycles and company audits. How we have prepared for intermediary lenders and low interest EQ2 lenders. We share our best practices, mistakes and successes. It is a small gathering of individuals performing the same tasks for different but similar companies. Your company accountant/financial manager will also get time to share with others in the industry.

8:30am – 9:00am –
Intro: Best Practices Beginnings
The importance of laying a good foundation for managing a living, growing and changing non-profit company.

9:00am – 10:00am –
Genesis of the Bucket Grant Management System
Learn from industry professionals who have had to manage the finances of a Native CDFI with multiple revenue streams. These individuals have grown with the NNDF from small to large. Use the template we will provide to build your own “bucket.”

10:00am – 12:00pm –
Laying the foundation for your accounting system
It is important to lay the foundation for your accounting system. You set up your initial system properly and it will grow with your organization. Help your Executive Director with their long term planning and short term budget management. Lower the costs of your annual audits. 

12:00pm – 2:00pm –
Multi-Bucket Operations
Each grant source is different. Almost like people they have their own personalities, their own needs, timelines and requirements. How on earth do you keep them straight?!

2:00pm-4:00pm –
Quickbooks Operations with Multiple Grant Tracking System
Learn from a former CPA and auditor how to build your accounting system to match your grant tracking system. Keep your entire organization’s finances on track month after month.

As a CDFI you have: Grant revenue, interest revenue, other earned revenue.

You also have: Grant expense based on timing and tasks. Operational expenses, other expenses.


9:00am – 11:00am – Lab Work
Exercises with the Grant Spreadsheet
Bring your own company’s information and use the templates provided to build a grant tracking document that fits your organization. Customize it. Play with it. And take it home to your Executive Director.

11:00am – 1:00pm –
Grant spreadsheets as an Operating Document
After learning how to create multiple “bucket” sheets you get to see how to incorporate those into a grand operating budget. This is a document that can be used year after year. Adapts to your growing organization and can be used throughout the year to track your organization’s progress.

1:00pm – 3:00pm –
Audit Preparations for full organization
Learn from a former auditor how to prepare your organization for your audit. Save your organization money on your audit. Ask questions about what an auditor is looking for. Share with other accountants and financial management professionals in the field.

FREE CDFI Financial Officers Workshop!


Do you know a Native CDFI with an accountant? A grant manager? Would like join with some other Financial Officers and learn best practices?

Please join the NNDF as we will be hosting a free workshop in Portland Oregon on July 12-13 to cover such things as “buckets” and “classes” and “audit preparation.”

This event is free if you RSVP before June 9th. After June 9th there will be a $220 fee for the workshop.

NNDF, the little loan fund that could

During these increasingly changing times we would like to take a moment to remind folks of the many lives and busineShane.sses that the Northwest Native Development Fund has impacted over just a few short years.

  • NNDF has made over $90K in Employee loans since 2010.
    • Demand for this product has fluctuated, reaching a peak in 2013 of $22K and leveling out to a recent annual average of $13K. We attribute this decline in requests to the success of our financial coaching and family budgeting classes.
  • Small Business and Enterprise Loans total $2 million since 2011.
    • Requests for small business and larger enterprise loans have increased dramatically in the past two years in response to our increased presence and credibility within the Colville and Spokane tribal markets

Since our beginning  in 2009 the NNDF has financed small business projects to the event that we have helped to create over 300 jobs. Now THAT’S a big impact for a small loan fund.

buy localThe NNDF has brought funding to a region that has been terribly overlooked by traditional lending institutions. We have worked to get many people out of the payday loan cycle that has devastated so many lives.

And the NNDF has provided many many financial and business education classes and workshops to help people start new businesses, grow existing businesses, save for a home or to repair their credit.

  • Over 300 Jobs
  • Over $2 million in financing
  • $ Thousands saved out of high interest scams

The Northwest Native Development Fund… We do a lot with just a little.