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Small Business Boost

SBB Small Business Program

Available Funds as of January 22, 2019: $1,500,000

Current Member Maximum: $300,000 per year

Small Business Boost 

Small Business Boost Program (SBB) provides recoverable assistance to qualified small businesses that would not otherwise meet member underwriting criteria. SBB is intended to help members invest in their community businesses by filling the gap when there is a lack of equity, unique collateral or shortfall in appraisal. As small businesses grow and repay, funds will be recycled back into the program to be reinvested in other small businesses which will create more jobs over time. SBB reduces member risk exposure and offers an opportunity for members to earn interest income in year two.

 

Small Business Boost Qualifications

  • SBB funds may be used in financing the startup or expansion of a small business, including: Building purchase
  • Land acquisition and construction
  • Facility expansion
  • Machinery and equipment purchase
  • Leasehold improvements
  • Permanent working capital
  • Closing costs

After enrollment, approved members may register a business for SBB funding. Each transaction must meet the following guidelines:

  • Borrower must be qualified as a small business based on Small Business Administration standards
  • Member must provide at least 40 percent of total financing
  • The maximum SBB loan amount is $100,000 or 50 percent of the member loan to the small business
  • At least one job must be created or retained for every $50,000 in SBB funding
  • Member must demonstrate loan does not meet their underwriting criteria without the SBB funds
  • Businesses may obtain only one SBB loan
  • If deal involves real estate, at least 51 percent of the real estate must be occupied by the small business

In transactions involving refinancing, at least 33 percent of the total business deal must be made up of new money

Small Business Boost Loan Terms

The loan term for non-real estate transactions can extend up to seven years and be amortized up to 10 years. If financing of real estate is greater than 50 percent of the project costs, the SBB loan term will be the lesser of 10 years or the member loan term. The amortization of program funds has a limit of 15 years for transactions involving real estate.

See the 2019 Small Business Boost Program Manual for full program details.

 

Member Enrollment

Members who attend one of the SBB Webinars may submit the following information to FHLB Dallas to be considered for SBB in 2019:

  1. SBB Enrollment form
  2. Executed copy of the SBB Master Agreement
  3. Excerpt of member’s loan policy that states the underwriting standards, including equity, loan to value, and debt coverage ratio requirements

FHLB Dallas will review the forms and notify the member of their acceptance into the program. Only enrolled members can then submit applications during open funding rounds for qualified small businesses.

Member Benefits

FHLB Dallas members benefit from SBB in a variety of ways:

  • Serves as gap financing to make small business deals bankable
  • Integrates with existing commercial underwriting; no additional underwriting required
  • Creates new business relationships and cross-selling opportunities
  • Provides additional fee income on the SBB loan
  • Qualifies for Community Reinvestment Act credit
  • Strengthens the local economy by helping to create and retain jobs

 

Small Business Boost – Marketing Materials

If small businesses are the heartbeat of a community's economy, community partnerships are the lifeblood. Learn more about how FHLB Dallas members can breathe life into their communities through SBB. 

Download the SBB brochure, a high-level look at the benefits of SBB for members, borrowers and interested parties.

 

​Applying for Small Business Boost Funds

To apply for SBB funds during an open funding round, enrolled member institutions must submit a completed SBB Business Registration form along with a copy of the credit write-up and approval (or conditional approval) of the member loan. FHLB Dallas will notify the member of a decision within 10 business days. The member will then have three months to close on the SBB loan. Disbursement of SBB funds to the member’s FHLB Dallas demand deposit account is completed after the funding request form and all supporting documentation has been received and approved.

See the 2019 Small Business Boost Program Manual for full program details.

Small Business Boost Monitoring

It is the member's responsibility to monitor the performance of the loan. In year two, FHLB Dallas will request a Performance Management Review be completed to confirm compliance with the SBB program including the number of jobs created or retained.

Small Business Boost Loan Repayment

The member should collect repayments from the small business in accordance with the amortization schedule provided by FHLB Dallas. Principal and interest payments collected for the SBB loan will be remitted to FHLB Dallas annually. Prior to each annual remittance, FHLB Dallas will confirm the amount due. Program funds are repaid to FHLB Dallas only upon the ability of the small business to make these payments to the member.

FHLB Dallas should be notified immediately of any loan payments that are 60 days or more past due. In the case of loan default, the member should commence reasonable collection efforts for the member loan and SBB loan. If there are insufficient funds to repay the SBB loan, a written notification detailing the recovery process must be provided to FHLB Dallas.