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Small Business Boost

Small Business Boost Program

Available Funds as of September 18, 2020: $758,546


 Small Business Boost 

In response to the COVID-19 pandemic, and as part of FHLB Dallas’ COVID-19 Relief Program, the Small Business Boost program (SBB) will be available beginning May 1. FHLB Dallas has expanded its uses to assist members in aiding small businesses impacted by COVID-19.

SBB is an economic development program offered by FHLB Dallas intended to help participating members provide financing for qualified small businesses by filling the gap between what the member can finance and the loan request made by an eligible small business. For example, SBB can fill the financial gap when the small business does not have the required equity or collateral to get their loan request fully funded by the member.

SBB funds are provided as a secondary, unsecured loan in conjunction with a loan made by the participating member institution. There are no repayments due on the SBB loan in year one which helps improve initial cash flow for the small business.

SBB funds can be used for the start up or expansion of a small business, including building purchase, land acquisition, construction and other related uses. Funds may also be used for permanent working capital to pay fixed costs, payroll, accounts payable and other bills that cannot be paid because of impacts from the COVID-19 pandemic.
   



 

Small Business Boost Qualifications

Recently, small businesses have been hit hard by mandatory closures and safety measures required to slow the spread of COVID-19. Qualified small businesses may be eligible to receive SBB recoverable assistance to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of impacts from the COVID-19 pandemic. SBB funds may also be used in financing the startup or expansion of a small business, including:

  • Permanent working capital
  • Building purchase
  • Land acquisition and construction
  • Facility expansion
  • Machinery and equipment purchase
  • Leasehold improvements
  • 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
  • The member must provide at least 40 percent of total financing to the small business. Extending or modifying existing member debt may be used to meet this requirement. The member is not required to advance additional loan funds to the small business
  • 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

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 2020 Small Business Boost Program Manual for full program details.

 

Member Enrollment

Only enrolled members can submit applications during open funding rounds for qualified small businesses. To enroll, members may request the SBB enrollment package (SBB Enrollment Form and SBB Master Agreement) be sent via DocuSign by submitting a request using the contact form at fhlb.com/sbb or by emailing SBB@fhlb.com.

FHLB Dallas will review the forms and notify the member of their acceptance into the program.

Member Benefits

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

  • Serves as gap financing to help members meet their small business customer’s financial needs.
  • Integrates with member’s existing loan underwriting; no additional underwriting by the Bank
  • May create new business relationships and cross-selling opportunities
  • Provides additional fee income on the SBB loan
  • Qualifies for Community Reinvestment Act Service 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.
The SBB Lender Guide will help walk you through the process of identifying, qualifying and administering program funds.

 

Applying for Small Business Boost Funds

To apply for SBB funds during an open funding round, enrolled members may request the SBB Business Registration form be sent via DocuSign by submitting a request using the contact form at fhlb.com/sbb or by emailing SBB@fhlb.com. In addition to the SBB Business Registration form, a copy of the credit write-up for the member loan and organizational documents for the small business will be required.

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 2020 Small Business Boost Program Manual for full program details. The SBB Lender Guide will help walk you through the process of identifying, qualifying and administering program funds.

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.

Request DocuSign Forms

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Helpful Resources

 

Call Community Investment at 800.362.2944.
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