Startup Funds Available For Arkansas Entrepreneurs
by April 9, 2015 5:30 am 96 views
For Arkansas entrepreneurs taking their first steps into the startup world, First Community Bank of Batesville is offering financing through a federal program aimed at promoting early stage business development and job creation.
The Federal Home Loan Bank of Dallas, through its member banking institutions across Arkansas, Louisiana, Mississippi, New Mexico, and Texas, is now offering financing through Economic Development Program (EDP) advance loans.
At the same time, a borrower qualifying for an EDP advance may also be eligible for accompanying Economic Development Program Plus grants, which are noncompetitive and available in amounts up to $25,000 on a first-come, first-served basis.
“For a startup business, having enough down payment is often a challenge, especially since most financial lenders expect a potential borrower to have ‘skin in the game,'” said Herb Lawrence, First Community Bank vice president of government guaranty lending. “With the EDP Plus grant program, a $10,000 equity injection becomes $20,000. This program substantially increases the business owner’s equity position while reducing the size of the loan that would be required.”
In 2014, FHLB Dallas provided $997,276 in EDP Plus grants to support 49 small businesses. Of the $1 million allocated for the grants in 2015, $651,485 remained as of April 1, 2015.
“In a number of cases, especially with a startup business, First Community Bank uses U.S. Small Business Administration guaranty loan programs in conjunction with the FHLB Dallas EDP program, significantly improving the borrower’s probabilities to succeed,” Lawrence said.
However, Lawrence emphasized that access to the federal grant is dependent upon the borrower’s eligibility for a commercial loan. Also, there are several specific requirements set out by FHLB Dallas to be eligible for the grant, including contributing an amount at least equal to 15% of the loan amount.
For more information about the EDP programs, including eligibility requirements, contact First Community Bank of Batesville. The Federal Home Loan Bank of Dallas is one of 12 district banks in the FHLBank System, created by Congress in 1932. Click here to learn more.