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Banking On Business

What is Banking On Business?

Banks are sometimes unable to lend money to small businesses — especially start-ups — that lack sufficient equity or cash flow. But with FHLBank Pittsburgh's Banking On Business (BOB) program to make these deals more bankable, financial institutions are more willing to provide loans.

Delivered through member financial institutions, BOB funding helps eligible small businesses with start-up and expansion. Each BOB dollar FHLBank contributes will likely leverage an additional $6 in financial resources to small businesses in the region, thereby creating or retaining jobs and improving local communities.

BOB offers recoverable assistance to be leveraged with member financing to help small businesses that need it most. Since 2000, FHLBank has funded more than $37 million in BOB funding to assist small businesses in our district, creating or retaining more than 4,700 jobs.

What qualifies for BOB funding?

Banking On Business (BOB) funds may be used in financing the start-up or expansion of a small business and may be applied toward:

• Purchase of a building
• Land acquisition and construction
• Expansion of a facility
• Purchase of machinery and equipment
• Leasehold improvements
• Permanent working capital
• Closing costs

NOTE: Not eligible for funding is any small business that:

• Does not meet FHLBank's definition of “small business”
• Is in the financial, insurance, real estate or government sectors
• Is a nonprofit organization
• Is in the housing area (which gives them access to our Affordable Housing Program [AHP] and Community Lending Program [CLP] programs.)

As part of the program, each participating member financial institution must make a loan to the customer in combination with recoverable assistance using BOB funds. When the customer repays the BOB-funded loan, the member must remit these payments to FHLBank annually.

BOB funds assist communities as follows:

• Creating/retaining jobs
• Assisting members in providing capital to underserved areas and for underserved populations
• Promoting local economic growth

What criteria are used?

Member financial institutions submit an enrollment form to access a general pool of BOB funds (similar to the First Front Door program) on a first-come, first-served basis. BOB funds may be used for any business located within Delaware, Pennsylvania or West Virginia.

Applicants are encouraged to use Small Business Development Centers and similar entities to provide ongoing technical assistance to small businesses participating in the program.

All grants are in the form of recoverable assistance, with specific repayment terms. Each transaction with a small business must meet the following guidelines:

• The member financial institution must show that the loan would not have been made without BOB financing.
• The member must provide financing and have credit exposure in each transaction.
• The member must provide a loan of at least 40 percent of the total project cost.
• The total BOB financing must not exceed 50 percent of the member loan, except in cases when the member uses a public loan guarantee program. In such cases, BOB will provide up to 50 percent of the remaining exposure of the member bank.
• The terms and conditions of the transaction must be consistent with similar credit transactions the member makes.
• Businesses can receive only one BOB loan.

How do you apply?

Members can call the Community Investment Department at 1-800-288-3400 or contact us via e-mail to inquire about fund availability or to request an application. The application contains:

• An enrollment form requesting participation in BOB
• A registration form for each qualifying small business
• A funding form for requesting funds at closing for the small business identified in your registration form
• A BOB performance measurement report is due the first year of repayment

Electronic versions of the updated BOB Manual and forms (which are within the manual) are available for download at right.

To register a business, e-mail a copy of the completed BOB registration form to Brent Anderson. Then mail the original and signed BOB business registration form, with supporting documentation, to Bill Joseph, 140 Maffett Street, Third Floor, Plains, PA 18705.

The Community Investment Department can assist you in completing applications and any supplemental forms, and in explaining the responsibilities of each party involved in the BOB program. To speak to a Community Investment representative about BOB, please contact Brent Anderson at 412-288-2864 or Bill Joseph at 570-823-0644,or contact us via e-mail with questions.

Real Life Stories

When the owners of a third generation, family-run machine shop in New Kensington, Pennsylvania needed to expand their business, they turned to FHLBank Pittsburgh and its member, Standard Bank, for their commercial loan needs.

• Read full story

Resources

Related Documents

• Fact Sheet (pdf)
• BOB Manual (pdf)
• BOB Registration (xls)
• Members Enrolled (pdf)