The $87 million Shreveport Federal Credit Union has used the long-term capital it received from the U.S. Treasury's Community Development Capital Initiative to grow its portfolio of very small business loans.

Funded with money from the Troubled Asset Relief Program, the CDCI funneled longer-term, low-interest loans to community development credit unions that NCUA approved as “viable.” Credit unions that accepted the loans had to agree to repay the money in eight years and to accept a host of other restrictions meant to oversee the use of TARP funds by much larger banks.

Shreveport CEO Helen Godfrey-Smith said a micro loan in her membership was running at about $10,000 and that the CU was making the loans to members who had established businesses that needed the capital to expand. The credit union received $2.6 million in loans from the program, Godfrey-Smith reported.

She explained the CU had opted to help members with at least five years of entrepreneurial experience to both help it better manage loan risk and to help make sure the money went more quickly to job creation.

“Maybe they have had a lawn care or home improvement business that they have wanted to expand for some time and just lacked the money for additional equipment they need,” Godfrey-Smith explained. “A loan from their credit union can help them get that equipment and then have to hire additional people to help with the extra work,” she added.