AFCU and FHLB Dallas Empower Small Businesses with Loans

Empowering Local Businesses Through Innovative Financing

A Small Business Boost (SBB) loan, provided by Arkansas Federal Credit Union (AFCU) in collaboration with the Federal Home Loan Bank of Dallas (FHLB Dallas), has recently played a crucial role in funding a new premium doggie daycare. This establishment, known as Rowdy Ruff House, is designed to enhance the community's pet care services, contributing to local economic development.

Bridging Financial Gaps for Entrepreneurs

The SBB program is specifically designed to close the financing gap that small businesses often encounter. Oftentimes, there is a discrepancy between what a traditional lender can provide and the amount a new business requires to thrive. In this scenario, Rowdy Ruff House benefited from an SBB loan that managed to cover the interest payments during their construction phase. Jerry Wilson, the owner of Rowdy Ruff House, expressed gratitude for the financial support saying, "The loan was a welcome breath of fresh air.”

Overcoming Financial Challenges

Wilson shared that the first year of business can be particularly tough, especially during construction when there are no incoming funds. He highlighted that without the SBB loan, he would have faced significant challenges in covering his construction payments. This program has been pivotal as it offers flexible financing, ensuring that cash flow remains steady while the business is getting set up.

Supportive Terms for Small Businesses

One of the standout features of the SBB loan is that there are no repayments required during the first year. This arrangement significantly aids small business owners like Wilson, allowing them to focus on establishing their operations without the immediate burden of loan payments. Randy Williamson, senior SBA lender at AFCU, underscores this by stating that maintaining cash flow in the first year is vital for new businesses.

The Ripple Effect on the Community

According to Steve Otto, head of Member Sales for FHLB Dallas, the SBB program does not just benefit individual businesses; it has a broader economic impact. As small businesses like Rowdy Ruff House grow and repay their loans, the funds are cycled back into the SBB program to support other emerging businesses. This cycle of investment fosters job creation and strengthens the local economy over time.

Significant Contributions in Recent Years

The impact of the SBB program has been substantial in recent years. In 2023 alone, FHLB Dallas was able to loan out $3.4 million to various small businesses through this initiative. This funding not only supported 46 businesses but also contributed to the creation or retention of 153 jobs, thereby making a tangible difference in the community.

About Arkansas Federal Credit Union

Arkansas Federal Credit Union stands out as the largest financial cooperative in the state, boasting over $1 billion in total assets and serving more than 130,000 members. AFCU operates as a member-owned cooperative, meaning the profits are reinvested in the communities they serve. Founded in 1956, AFCU is committed to supporting Arkansas residents in their financial journeys.

About the Federal Home Loan Bank of Dallas

The Federal Home Loan Bank of Dallas is part of a national network of 11 district banks created by Congress to support housing and community development. With total assets of $126.2 billion, FHLB Dallas provides competitively priced loans and credit products to roughly 800 member institutions throughout several states. Their work is vital for promoting local economic growth and aiding in community-focused projects.

Frequently Asked Questions

What is the Small Business Boost (SBB) loan program?

The SBB loan program is designed to provide financial support to small businesses by bridging the gap between what traditional lenders can offer and what businesses need to succeed.

Who can apply for the SBB loans?

Small businesses that meet specific eligibility criteria established by Arkansas Federal Credit Union and FHLB Dallas can apply for the SBB loans.

What are the benefits of the SBB loan?

One of the primary benefits is that there are no repayments required during the first year, which helps manage cash flow during crucial startup phases.

How does the SBB program impact the community?

The funds from repaid SBB loans are recycled back into the program, which allows for continuous support of new and growing businesses, ultimately fostering job creation.

What is the mission of Arkansas Federal Credit Union?

Arkansas Federal Credit Union aims to support its members and the community by offering quality financial services and reinvesting profits into local initiatives.

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