Economic Development Program Advances and EDP Plus Grants Provide Capital for Start-Ups
BATESVILLE, Ark., April 2, 2015 /PRNewswire-USNewswire/ -- Starting or growing a small business is a challenge, especially when it comes to finding project financing. Fortunately for local entrepreneurs, the Federal Home Loan Bank of Dallas (FHLB Dallas), through member institutions like First Community Bank of Batesville, offers loans funded by Economic Development Program (EDP) advances.
A borrower qualifying for an EDP advance may also be eligible for an accompanying Economic Development Program Plus (EDPPlus) grant. EDPPlus grants are noncompetitive and available in amounts up to $25,000 on a first-come, first-served basis to promote and enhance small business development and job creation.
"For a start-up 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 EDPPlus 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 EDPPlus grants to support 49 small businesses. Of the $1 million allocated for EDPPlus grants in 2015, $651,485 remained as of April 1, 2015.
"In a number of cases, especially with a start-up 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. He emphasized that access to the EDPPlus grant is dependent upon the borrower's eligibility for a commercial loan. Additionally there are several specific requirements set out by FHLB Dallas to be eligible for the EDPPlus grant, including contributing an amount at least equal to 15 percent of the loan amount.
Greg Hettrick, vice president and director of Community Investment at FHLB Dallas, noted the value of the EDP. "So often, we see grants offered in the nonprofit arenas; whereas, for-profit businesses must locate financing without this support," he said. "The EDPPlus grant in conjunction with an EDP advance is money on the table to help businesses get off the ground or expand. It's one of the few grant programs I'm aware of for entrepreneurs."
For more information about the EDP advance and EDPPlus grant including eligibility requirements, contact First Community Bank of Batesville.
About First Community Bank
First Community Bank, which is locally owned and managed, opened on August 4, 1997 in Batesville, Arkansas and currently operates 16 full-service branches in Arkansas and Missouri, and a mortgage origination office in Craighead County, Arkansas. First Community employs 278 professional bankers and now reports assets of more than $959 million. Over the past 12 months, First Community Bank business customers have received $92,950 from the EDP advance and EDPPlus grant programs.
About the Federal Home Loan Bank of Dallas
The Federal Home Loan Bank of Dallas is one of 12 district banks in the FHLBank System, created by Congress in 1932. FHLB Dallas, with total assets of $38 billion as of December 31, 2014, is a member-owned cooperative that supports housing and community development by providing competitively priced loans and other credit products to approximately 900 members and associated institutions in Arkansas, Louisiana, Mississippi, New Mexico, and Texas.
Contact:
Corporate Communications
Federal Home Loan Bank of Dallas
www.fhlb.com
(214) 441-8445
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SOURCE Federal Home Loan Bank of Dallas
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