Five important questions when you’re thinking about merchant services Jun 11, 2015, 8:11 am By Heidi Carmack Pfaffroth

Guest post by Richard Gray

Utah has a thriving business culture with business providing many different products and services. There’s no doubt, then, that a variety of businesses require a variety of merchant services. Merchant-services providers have solutions that are right for you, solutions that work for you and solutions that may hinder your business goals. Here are some questions that can help guide you in making sure your business is using merchant services to reach your goals.

Let’s start with a question that every good merchant-services provider should be asking their customers—you. Think about whether your provider knows this about your business.

What is the most important product or service your business offers? Your merchant-services provider should know the most important part of your business so they can offer the solutions that make the most sense for you. It’s easy to think of merchant services as just the ability to accept online payments or use a credit card machine, but there are so many different offerings in the merchant-services industry that there is often a nuanced solution that fits different businesses more perfectly than a generic solution. If your provider couldn’t answer this, consider re-thinking what they’re offering you.

Talk to your provider about the merchant services you’re using, the problems they are or aren’t solving for you and your goals. Make sure they understand your distribution channels and the value your business offers. This may aid your provider in finding the best solution instead of a solution.

The questions below may help you to discover where there is room for improvement in the merchant services you’re using.

What are other solutions to my merchant-services problem? Ask your provider this question. If you think you need a PIN pad so customers can use debit cards at your store, make sure you’re also taking the time to describe what service you offer your customers and what your customers expect from you. Perhaps there is a better, easier solution for you and your customers. Maybe a device that allows you to take payments on your phone is more effective for the types of sales you’re making. Your merchant-services provider should have answers and more than one solution for you, with different opportunity costs and benefits for you to weigh.

The next three questions you should ask yourself now and then make a note to revisit regularly after you find a merchant-services provider that works for you.

How is my merchant-services provider helping me to get my money faster? Answering this question is a step in understanding how the services you’re using are improving your bottom line. Your merchant services should be able to provide a payment solution that is faster for you and more convenient than other merchant-services solutions—make sure it is. Looking at the ways your merchant services provider is helping you to improve cash flow will help you to also see where your business or payments are getting caught up and can use a little improvement.

How is my merchant-services provider helping me to use technology to improve efficiency in my business? Is your merchant-services provider keeping you up to speed on changes in the industry or new technology? Are you using the same services you started with 10 years ago? Are your payment-acceptance channels EMV-chip enabled? In order to make sure your business is keeping up with what customers in your industry want and need, you need to be sure that your merchant services provider is keeping up with changes in technology.

How are the merchant services I’m using helping me to reach my business goals? Business owners are so busy and pulled in so many directions that it’s easy to get used to and caught up in the status quo. Asking this question of your team might not feel as immediate and urgent as making sure online payments are received smoothly, but it’s just as important. Make sure your actions are aligned with your strategy and helping you to reach your business goals. If you’re not sure whether they are, get back to why you needed a merchant services provider in the first place. You might find you need an adjustment in what you’re using, or maybe you just needed a reminder that your business is offering the right services for customer payment.

If there’s something that you feel is missing from the merchant services you’re using, or something your provider hasn’t offered, but you wish they had, ask! Your merchant services provider might not even know that you are looking for a solution in another area. Your merchant services provider won’t have impetus to improve unless you press on them a little. Help them to understand what problems you’re facing with merchant services so they have an opportunity to solve them.

With a thriving business community here, most readers are familiar with some type of merchant services. Asking these questions of your provider, your team and making sure your provider is asking you the right questions will help you to find the right solution for your business, not the right solution for the business next door.

Richard Gray is senior vice president of SBA lending at Bank of American Fork, Utah’s community bank leader, an Equal Housing Lender and Member FDIC. Richard has assisted local small businesses in obtaining SBA funding for more than 25 years. He served on the board of directors for nonprofit Kostopolus Dream Foundation and was the chairman for nonprofit Utah Microenterprise Loan Fund, Salt Lake City.

Category: Business | No Comments

Optimizing Your Cash Flow Using Open-Book Management Jun 04, 2015, 3:08 pm By Heidi Carmack Pfaffroth

Guest post by Richard H. Tyson, CEObuilder

Guest blogger Tyson is starting a series here about open book management. Make sure you check back for additional articles!

My last several articles have dealt with open-book management, a process in which data is shared with employees to help create desired results. My emphasis has been on achieving financial outcomes, since every business venture must make money.  In so doing, I have stressed that the majority of key performance indicators (KPIs) from financial statements are lagging indicators. They are the results of leading indicators that create those financial outcomes.

Today, I want to give attention to the leading indicators that most directly drive your financial results, specifically those metrics that define why your customers spend their scarce cash for your product or service.  This is the reality for all of us; in order to achieve financial success, we must serve the needs and wants of those who pay the bills.

Much has been written about the customer-driven company.  Marketing professionals appropriately focus here, giving excellent counsel regarding customer selection, and how to build and maintain customer loyalty. While offering valuable insight, these experts often fail to make the connection between the strategies they recommend and specific desired financial outcomes. And if they do reference these connections, they rarely focus attention on the measurement of those strategies and correlating them as the cause of desired financial outcomes.

For every customer and market segment in which you do business, customer outcome metrics should be developed. These should include:

A clear definition of the customer problem, need or desire you intend to solve. Even if you have been in business for decades, it’s a good idea to revisit this. From your definition, you will have the basis for determining how well you actually measure up in serving your customer. Often these metrics will include a measure of how well your competition does in meeting those needs as well.

New-customer acquisition measures, such as how well promotional offers create prospect attention, interest, desire and action. Specific metrics here might include sign-ups, downloads, coupon redemptions, referrals, purchases or testimonials. A/B testing can be employed to measure the effectiveness of any two advertising or web marketing strategies against each other, thereby allowing you to accurately determine which strategy creates the best results.

• Core competency factors. Metrics here objectively assess the importance of key elements in your value proposition. They are what you do best, such as providing a continuous stream of innovative products and services, a strong consultative relationship, leading-edge expertise, proven safety or security, on-time delivery, high quality or a myriad of other components unique to your company or brand. How well do these competencies align with solving your customers’ problems?

Often, two or more of these key elements are inherently in conflict. For instance, we often find that a manufacturer’s value proposition offers both short lead times and unerring quality. When customers are asked which of these they want, the answer is inevitably “Both!” However, when rush orders begin to compromise quality, the answer is not so clear. In fact, this conflict often marks the demise of customer loyalty—and the loss of the relationship. Avoiding this type of dilemma requires careful policy decisions, followed by continuous measurement of adherence to the policies chosen, as well as regular communication with customers.

• Customer retention. My clients have often sought an advocacy relationship with their customers; that is, they are not satisfied until their customers are so delighted with their relationship that the customers openly evangelize for the brand. One way to measure this leading indicator is to track your net promoter score (NPS). Based on customer surveys, NPS tracks the ratio of your customers who are likely to recommend your product or service (promoters) to those who are not likely to do so (detractors). By measuring the NPS on a regular basis, your company can ascertain whether customer retention is improving or declining. Further, it provides additional impetus to talk to your customers to better understand why they stay or leave!

The bottom line here is that if you want to have a bottom line, care and feeding of the customer is the key. To do this well, customer strategies must be clearly defined—and they must be tracked and measured to be sure that the correlation between those strategies and financial outcomes clearly exists.  The dashboards created to measure customer strategies should be included in your open-book management practices, i.e., shared openly with all of your employees. When you have done this, you will truly have a customer-driven company!

Richard Tyson is the founder, principal owner and president of CEObuilder, which provides forums for consulting and coaching to executives in small businesses. For 22 years, CEObuilder has successfully brought about an outstanding financial return for CEO and executive clients through providing leading-edge content in the areas of strategizing, team-building, problem-solving and managing for results, as well as the use of proprietary learning and coaching models.

Summer fun in Utah! Jun 01, 2015, 8:44 am By Heidi Carmack Pfaffroth

This summer, Bank of American Fork is celebrating Utah’s cities and the wonderful people that live in them. Join us for Community Appreciation Day at your local Bank of American Fork branch for free food, prizes, games and fun. And don’t forget to wave to us as we float through your city parade!

The extra fun this summer is that we’re also celebrating Seymour the Piggy Bank’s Sweet 16, so look for him when you see hot-air balloons and on our float, and use #SeymoursSweet16 when you post your photos!

See you around this summer!

CITY/BRANCH  PARADE INFO COMMUNITY APPRECIATION DAY
Alpine  August 8, 10 a.m. August 7, noon-2 p.m.
Bluffdale August 15, 9 a.m. N/A
American Fork   July 11, 9:30 a.m.            July 10, 9 a.m.-5 p.m.
Draper                July 18, 9 a.m.          July 17, 9 a.m.-5 p.m.
Eagle Mountain June 6, 10 a.m. N/A
Highland                August 1, 10 a.m.         July 31, 9 a.m.-5 p.m.
Lehi                       June 27, 10 a.m.         June 26, noon-2 p.m.
Murray                     July 4, 9 a.m.              TBD
Orem                       June 13, 7 p.m.         June 12, noon-2 p.m.
Pleasant Grove           June 20, 10 a.m.       June 19, noon-2 p.m.
Riverton                  July 3, 6:30 p.m.       July 2, 9 a.m.-5 p.m.
Sandy                     July 4, 6 p.m.             July 3, noon -2 p.m.
Saratoga Springs       June 13, 10 a.m.         June 12, 9 a.m.-5 p.m.
Spanish Fork             July 24, 9 a.m.                   July 22 & 23, 9 a.m.-5 p.m.
St. George September 19, 5 p.m. TBD

How Jan helped protect our customer’s money Apr 06, 2015, 9:16 am By Heidi Carmack Pfaffroth

How Jan helped protect our customer’s money

Learn about what you can do to reduce the risk of fraud.

The other day Jan told me about a recent fraud attempt that she dealt with in the customer service center. The fraudster was targeting a senior’s primary account and Jan was able to keep the fraudster away from the customer’s money until the customer and his son could close the account and open a new one. Later, the customer and his son learned a few things they could do to keep the customer’s money a little safer in the future. Here’s what happened, in Jan’s words.

I received a phone call soon after the customer-service center opened on a Thursday at around 7:30 in the morning. The man on the line requested to set up his account for online banking. I asked for some account information and he said he could provide each piece—which did I want? Since any of the options would do, he gave me the information I needed. Since I needed to verify his identity in order to set him up with online banking, he also gave me some identifying information. He had the right answers, but I just felt like something was off. I had this feeling that something was wrong.

I looked at his account at some information and notes—I felt sure that I wasn’t speaking with the real customer. A few details tipped me off that something wasn’t right. As I talked with him, I could tell it was not our customer. I decided to ask for a few more identifiers, just to be sure. Over the course of talking through more questions and answers, he answered most correctly, but one wrong. It was a mistake that the customer wouldn’t make, but a fraudster could.

I didn’t tell him which question he answered wrong, but I let the man on the phone know he needed to come in to the branch and show his ID so we could help him. In his friendly way, he said he was nearby and would be in when we opened.

After I put an alert and pending close on the account, I left a message for the branch manager near the customer to call me. Only a few minutes later, the customer and his son contacted us. We discovered that a fraudster told the customer that he won something and they needed information from him to put the money into his account. He gave his information to the friendly fraudster, who was the Las Vegas man I spoke with on the phone. The customer told his son about his “winnings”, who urged him to call the bank, as he suspected it was fraud. As soon as the branch opened, the customer and his son were there to close the account and open a new one.

Thanks to Jan’s years of experience and care for her customers, she knew not to just wait for the right answers and move forward with the fraudster’s request—she listened to her feeling and looked for some signs. If the fraudster—who had a lot of information about our customer—had been able to set up online banking, he could have easily wiped out our customer’s account in a few minutes, probably before our customer’s son would have heard about and suspected what was happening.

One advantage of keeping your money in a bank versus other places is that the bank will protect its customers in circumstances like these. Assuming that the real customer was not an accomplice to the fraud, and assuming that the customer notified the bank promptly, the bank would have reimbursed the customer the amount that was stolen. However, it’s better for everyone to prevent the fraud from happening so that no reimbursement is necessary. Even with reimbursement from a bank, fraud is a terrible inconvenience for our customers and an invasion of their privacy.

We can help you put a few extra checks and balances in place to reduce the risk of fraud. If you don’t need help managing your finances, but could use an extra set of eyes to watch for fraud, we can help you set up a helper with view-only access. They will be able to see what’s going on with your account, but can’t make any changes or transactions. They can watch for unusual transactions in real time and you can even set up alerts for types of transactions you don’t usually do.

Here’s one type of structure we often recommend:

If you need a little more help, you may want to consider opening a smaller, secondary account with an automatic transfer from your primary account each month that will cover your groceries or bills or whatever aspect of your finances you need help with. You can then add a trusted helper only to that smaller account. You can add a second helper with view-only access to watch over both accounts—to protect you and your first helper from fraud, suspected fraud or accusations. There are more ways we can help you set up the help you need—just talk to one of us and we can walk you through some of the options.

We care about you. Call us at 800-815-BANK or visit one of our locations to put some checks and balances in places. Visit here for more resources on seniors and fraud.

Take advantage of $5K tax deduction Apr 02, 2015, 5:29 pm By Heidi Carmack Pfaffroth

If you’re looking for a way to reduce your taxable income for your 2014 taxes, consider the advantages of an IRA—you have about a week to make contributions to an IRA for last year. Contributions to IRAs can be made as late as the first due date of a tax return, and can be considered retroactive to the previous tax year, so you can still make a qualifying IRA contribution and get the tax benefit if you qualify for your 2014 tax filing. For 2014 the dollar limits for IRA contributions are $5,500 if you are age 49 and younger, $6,500 if you are 50 and older.  If you don’t have an IRA, Bank of American Fork can help.

Bank of American Fork’s IRAs are held in CDs, not in the stock market, so you are guaranteed a safe return and you are covered by FDIC insurance. Unlike some banks, we don’t charge you holding fees or an annual fee. Depending on the type of IRA you choose and subject to IRS rules, you can earn tax-free or tax-deferred income. When you are eligible, you can receive distributions from the money in your IRA.

Here are the types of IRAs we offer:

Traditional IRA: Allows contributions of pre-tax income. Taxes are paid upon distribution.

• Roth IRA: Allows contributions of after-tax income, if qualified. Qualified distributions of principal and interest are tax-free. After retirement, distributions are not required.

• SEP IRA: SEP stands for Simplified Employee Pension. It allows a business to make contributions toward its employees’ retirement using IRAs. These are especially popular with sole proprietors, where the business owner and the employee are the same person. SEPs allow a higher maximum contribution than a Traditional or ROTH IRA. (See IRS for eligibility requirements)

At Bank of American Fork, variable-rate IRAs require only $10 to open, while fixed-rate IRAs can be opened with either a $500 or a $5,000 minimum opening deposit.

Don’t wait any longer to start your retirement savings and save on your taxes. Open an IRA today! At Bank of American Fork, our friendly staff can meet with you and show you firsthand how we can help you secure a strong financial future. Call 1-800-BANK to set an appointment. We look forward to speaking with you.

Consult your tax advisor for details.


Electronic payments to speed up this year and next Mar 16, 2015, 9:26 am By Heidi Carmack Pfaffroth

Consumers will see a change in how quickly funds are available.

Stella calls her dad, Christopher, and asks him to send money for her housing payment, which she needs, like, yesterday. And yes, now, in 2015, Christopher drives over to the nearest branch of the national bank he uses and deposits a paper check that will go into her account so the funds are available to Stella the next day. Christopher isn’t afraid of sending electronic payments or unfamiliar with his bank’s person-to-person payment service, it’s just that sending an electronic payment could mean that it will be three days before Stella can use the funds Christopher sends.

The good news for Christopher and Stella? Electronic payments should speed up, nationally, this year and next.

The Federal Reserve System just released its next steps in developing an infrastructure to speed up electronic payments and settlements.

When you make a person-to-person payment or send an electronic payment for a utility bill, the time it takes for your payment to process is affected by the Federal Reserve’s system on the back end. For consumers, the coming change means faster and more secure payments.

The Fed is launching a task force to find practical approaches to speeding up the system and to get feedback from industries involved in payments systems to find additional ways to offer greater speed, security, efficiency and cross-border options.

This year and the beginning of 2016, the Fed is laying out a policy framework for the new system and with the feedback from the task force, will begin implementing the practical solutions. The Fed has already identified a couple of ways it will change to speed up payments and make it safer. To improve security, the Fed will also expand its anti-fraud and payments risk management offerings. Its longer-term goal is weekend or 24-hour service, and added that it would promote greater use of same-day ACH and expand its international payment services.

As the Federal Reserve successfully implements policy to speed up its end of the electronic payments process, Bank of American Fork customers can expect to see any electronic payments they make through online banking speed up, including electronic bill pay, person-to-person payments and transfers between accounts. We’re always looking for ways to offer you better service so we monitor national financial news with you in mind—this is a story we’re excited about.

Since Stella lives less than a few hours away from Christopher while she’s attending college, Christopher has even considered driving to where she lives to drop off cash. Soon, electronic payments will be faster than sending the money by Pony Express, and Stella and Christopher won’t have to worry about being robbed on the trail by outlaw Jesse James.

Avoiding Failure-to-Launch with Open-Book Management Mar 12, 2015, 8:10 am By Heidi Carmack Pfaffroth

Guest post by Richard H. Tyson, CEObuilder

Guest blogger Tyson is starting a series here about open book management. Make sure you check back for additional articles!

My last several articles have stressed the importance of open-book management, a process whereby every employee uses financial data to help achieve desired business outcomes.  I have stressed the use of both income statement and balance sheet information, with an emphasis on profitability and—even more importantly—on cash flow.

Further, I have called attention to the fact that the majority of key performance indicators (KPIs) from financial statements are lagging indicators. These are the results of leading indicators, such as the number of sales calls, lean manufacturing techniques, expense controls, how fast you collect receivables, etc. By illuminating both leading and lagging indicators, virtually any organization will enjoy significant improvement in its performance, productivity and bottom line.

Conceptually, I have found that open-book management makes sense to nearly all CEOs and business owners. Paradoxically, however, very few seem to have the resolve to implement this practice in their own companies. Why? It boils down to a failure of making an unshakable commitment to the process.  I have found that a few essential questions often help firm up executive resolve to move forward with open-book:

• Have you clearly identified your desired outcomes?  Specifically, what enhancements would you like to see in your profitability and cash flow?

• What would be the benefits of these improvements? Specifically, will you have a stronger and more amicable relationship with your banker or equity investors? Will your company’s value be enhanced as an acquisition candidate? Will you simply have less stress and sleep better at night?

• What are the costs to enjoy those benefits? Will it require taking some time with your accountant to bring your financial statements up to date and perform some of the fundamental analyses I’ve discussed in my last several articles? Will that entail some out-of-pocket costs? Will you have to allow yourself to be vulnerable enough to openly share with your employees your financial warts? 

• Is it worth it? Commitment is almost always a function of cost-benefit. Do the benefits (improved profitability/cash flow, better relationships with the financial community, and less worry/better health) exceed the costs? If not, don’t bother with open-book! If, however, those benefits are attractive, then resolve to move forward.

One of the significant challenges of adopting open-book is where to start. First, consider the various actions you might take in launching open-book, and rank each action in terms of (1) its potential value to your company, and (2) how easy (or hard) implementation will be. Once each action is ranked according to these dimensions, you can easily place it on the following grid:

 

 Consider, for instance, the action of calculating (and improving) your company’s cash conversion cycle How valuable would an improvement of 10 days in your cash conversion cycle be? My experience says this would have extremely high value! How easy is this to do?  Well, it depends on how up to date and accurate your financials are, but let’s assume that it would take a bit of work to pull together what you need; we’ll call it “Hard to Do.”  So, the action of calculating and improving your cash conversion cycle would fall in the upper right quadrant.

With most who are new to open-book management, it is best to start with the upper left quadrant, as this represents “low-hanging fruit” and allows us to enjoy some early successes before moving to the more difficult high-value actions. One of my clients pursued open-book this way by doing two simple things: (1) he shared his monthly P&L with all of his employees, highlighting the fact that they had never enjoyed more than a 2 percent pre-tax net profit, and (2) he promoted the idea that they needed to exceed 6 percent pre-tax net for the current year.  This was very easy to do, but frankly, I doubted the value. However, I was wrong!  By launching open-book in this simple way, my client’s company did exceed six percent that year—and every year thereafter. Once his employees knew the profitability and the goal of the company, they began to look for ways to improve. “Easy to Do, High Value!”

Clearly, not every action under open-book management is easy, but I strongly recommend that all companies carefully consider the benefits of launching such a program. I believe you will see it is worth your commitment.

Richard Tyson is the founder, principal owner and president of CEObuilder, which provides forums for consulting and coaching to executives in small businesses. For 22 years, CEObuilder has successfully brought about an outstanding financial return for CEO and executive clients through providing leading-edge content in the areas of strategizing, team-building, problem-solving and managing for results, as well as the use of proprietary learning and coaching models.

Commercial and industrial lending Feb 26, 2015, 4:04 pm By Heidi Carmack Pfaffroth

How to finance commercial and industrial endeavors

Are you overwhelmed by the types of financing that are out there?

Whether you need money to start a new business, expand an existing one, build a new facility, purchase inventory or upgrade your equipment, Bank of American Fork has money to lend. We’re prepared with an experienced team of loan officers who can help you obtain the right loan for your business.

Here’s how you may want to prepare:

• Familiarize yourself with some of the types of financing that may be available for you. Use the handy guide below (or the PDF version here: Commercial and Industrial Lending) to look for some of the loan terms that would work best for you, including length of repayment, rate options and more. To search for the type of financing that may fit your specific need, try using the “find” function in your web browser (Ctrl + F) to search for a word, like “equipment” or “real estate.” Your web browser will highlight the word you’re searching for, and you can look at the chart to see the type of financing that may be effective. For example, if you find “equipment,” you’ll see that leasing may be a good option. Knowing a little bit about the types of financing available and what the terms might be may help you feel comfortable as you’re making decisions.

• Make sure you’re looking at the 4 C’s that lenders look at: Cash Flow, Credit, Collateral and Character. Learn more here.

• Prepare to qualify for a loan by evaluating your financial fitness and preparing or updating your business plan. If you feel like you’re still on this step, here’s a great resource.

• Get to know your loan officer. Even if you are still overwhelmed by the financing options available or confused by some part of the loan process, our experienced loan officers are ready to answer your questions and walk you through the process. Call 800-815-BANK or contact a business banker.

Category: Business, Loans | No Comments

Merchant services available at Bank of American Fork Feb 12, 2015, 8:00 am By Heidi Carmack Pfaffroth

Bank of American Fork offers some of the nation’s leading merchant services technology through TransFirst®, which offers proven, reliable systems in use by more than 200,000 merchants. Merchant services allow you to enjoy reliable business banking with a bank you trust. With merchant services through Bank of American Fork, you can accept a wide variety of payment types with highly competitive processing rates, available next-day funding  and free 24/7/365 U.S.-based merchant support.

Here are some of the highlights about merchant services offered through Bank of American Fork:

Accept all major bank cards at one low rate—with American Express® already bundled in! Process Visa®, MasterCard®, Discover®, and American Express® and PayPal™ payment card, all at the same rates. Most merchant services providers only offer American Express Card transactions as a separate contract, statement and rate, but with Bank of American Fork merchant services, all of your major bank card transactions will be on one statement, with one settlement and at one price.*

If you need in-store, mobile, wired, wireless and Internet-based processing, we have a variety of solutions for you.

• In-person or in-store payments – Whether you have terminals, a tablet, a cash register, a bar code scanner or other, we offer tech-forward point of sale (POS) transaction processing systems that work reliably wherever you need to go to make the sale.

• Online – A virtual terminal can be used to process credit-card and ACH transactions from any computer with Internet access anywhere in the world, allowing you to securely and efficiently handle a series of additional tasks including the verification, reporting and processing of credit-card and ACH payments.

• With your mobile device – Accept card payments with your smartphone or tablet so you can do business almost anywhere.

You’ll also be able to accept payments like checks, ACH and EBT. CrossCheck® provides for electronic processing and settlement of checks at the point of sale. ACH payment is a tool that electronically debits a customer’s bank account instead of using paper checks. With Electronic Benefits Transfer (EBT), electronic benefits from the government are administered via payment cards to tens of millions of recipients each month, includes programs such as SNAP (formerly food stamps) and TENF.

In addition to offering the merchant services you need to keep your business successful and running, we have made sure that security is the foundation of our electronic processing. We offer our merchant services through TransFirst® because of their state-of-the-art data security technology and our committment to keeping you and your customers safe from the very real threats of credit card fraud and identity theft.

For more information or to get merchant services, call 800-815-BANK or visit our website.

*Merchants that process less than $1,000,000 in American Express annual charge volume may be program-eligible (some restrictions and exclusions may apply).

Trademarks referenced above are the property of their respective owners and are not necessarily affiliated with Bank of American Fork or TransFirst.

Teachers, preachers and neighbors build their own homes Jan 26, 2015, 9:36 am By Heidi Carmack Pfaffroth

415 homes built, many jobs created through community reinvestment programs

Jane Farr was 64 years old when she and her husband decided to build their own home. They weren’t just designing the house and handing over plans to a contractor—they were going to be responsible for physical labor, including roofing, framing and more. Since their marriage a few years prior, the Farrs lived in a basement apartment and looked forward to one day being able to host family, especially when Farr’s children came to visit from the Philippines.

They applied for and were approved to participate in Self-Help Homes, an organization that coordinates funding and resources to help five to 12 individuals or families at a time in helping to build each others’ homes. Farr and her husband would be responsible for at least 35 hours of work a week and she was a little worried about how they would complete it, “in their old age.” Her husband, Ron Farr, was confident that they could do it together with the help of volunteers, family and friends.

Three days before they were going to break ground on the project, Ron passed away.

Farr wondered if she would be able to complete the project. Her husband was gone and she was still responsible for the same number of hours of work. Especially now, she wanted to have a home where her children and other family could visit. Inspired by Ron’s confidence in themselves, the Self-Help Homes process and the supportive community they were to be a part of, Farr moved forward.

“I was blessed with kind and supportive supervisors and four other families who were understanding of my limitations,” Farr said, less than a year later, during the open house for the four completed homes. “There were many times I felt protected during the program. I felt Ron was there for me. With my success in the Rural Housing Develop Corporation Mutual Self-Help Homes program, I could say to all that it is never too late to dream!”

Brad Bishop, the Utah director for Self-Help Homes, says it’s watching people like Jane Farr change over the course of the program that make it worthwhile for him. He’s been with Housing Authority of Utah County since 2000, and with Self-Help Homes since they started the program in Utah in 1998.

“The families that come in are different families than those that come out,” Bishop said. “I love seeing that change.

Bishop credits Self-Help Homes’ success in Utah to a commitment to building good, long-term homes that elevate the neighborhoods where they build. They use current plans and update them to make sure the style of the homes will fit in and be an enhancement to the neighborhood.

“Even if someone is a little resistant to new housing built through Self-Help Homes at first, by the end they realize that the people building homes in their neighborhood are their kids’ teachers, people they go to church with or are just like their own aging parents,” Bishop said.

In fact, an estimated 42 percent of Utah County would qualify for a program like this, according to Self-Help Homes.

With a high percentage of individuals and families who qualify for some type of aid in getting into a home that fits their needs and a home-buying landscape that has changed over the last 50 years, more and more people, businesses and organizations are coming together to help. In fact, one project by Self-Help Homes and the Provo City Housing Authority, the Maeser School and surrounding homes in Provo, brought together 17 different sources of funding to complete.

Bank of American Fork assists in programs like these by helping to obtain Affordable Housing Program (AHP) grant funds—for Self-Help Homes the grant funds are used to buy lots for upcoming neighborhood builds. The bank also donates time, tools and other equipment.

Self-Help Homes isn’t the only program benefitting from AHP grant funds. Bank of American Fork has helped other organiaztions like Northern Utah Neighborhood Improvement Project and Springville Senior Housing  to obtain grant funds and has participated in programs like the Federal Home Loan Bank of Seattle’s Homestart for more than a decade. Homestart provides grants to qualified home buyers to assist them with their down payment or closing costs.

All of these programs and organizations work in different ways to help individuals and families, but one thing is the same—people are helping their friends, family and neighbors.

Bill Swadley, a vice president and business development officer at Bank of American Fork, originally became involved in community reinvestment almost three decades ago. Along with others at the bank, most of his job is spent finding groups like Self-Help Homes, Habitat for Humanity, Homestart and more for the bank to help support. He then figures out what type of contribution will change lives—support in obtaining a grant, financial support from the bank, tools and equipment or something else. He also spends time matching up employees at the bank with specific skills to programs or organizations that need financial expertise on their committees or boards.

“These programs give people chances they may not have had otherwise. It allows more people to enter the free market system through homeownership or through starting a business. Individuals, families and our communities are strengthened,” Swadley said. “Bottom line, for me—it’s just the right thing to do.”

Swadley is just one of the many people at Bank of American Fork who are passionate about community reinvestment. Bill Swadley, Gary Sell, Richard Gray and Kelly Palmer are all involved in projects like Self-Help Homes. Their involvement includes a wide breadth of projects that help many segments of the communities the bank serves, including seniors, migrant workers, single-parent families, persons overcoming addiction, special-needs families and more.

“We exist to strengthen our communities,” said Swadley. “We live and work here, too, so we have a vested interest in seeing our neighbors, friends with small businesses and the economy thrive.”

More than 415 individuals or families are in homes partially funded by AHP grants that Bank of American Fork helped obtain. Another 63 are currently underway.

Sixteen of those in-process homes are part of a neighborhood in Elk Ridge. While some of the community was a little resistant to the idea of people building their own homes, they’ve quickly warmed up and now the city has even helped fund a playground in the neighborhood (that the new residents put in themselves, of course). The people that make up the Elk Ridge home-building group have proven that they are enhancing the neighborhood. They’ve proven that they’re just like their new neighbors. To celebrate, they had an open house to share stories from the building project and officially open their new community.

“There’s this electricity at the open houses,” said Gary Sell, vice president and mortgage loan officer at Bank of American Fork. “I love going because I get to hear two or three individuals talk about their experience. The whole neighborhood is made up of people who worked together to build their homes so there’s this energy between them.”

Bank of American Fork’s involvement in community reinvestment goes beyond community development loans for organizations like Self-Help Homes to help build houses. Bank of American Fork also makes more low-to-moderate-income mortgage loans than many of its peer banks. In making loans to small business owners, Bank of American Fork has helped create many jobs in our communities.

In addition to the many projects for which Bank of American Fork is the sole sponsor in obtaining grant funds, the employees at Bank of American Fork don’t hesitate to help obtain grant money for projects that are only partially supported by other banks. Sell describes his thought-process in taking on projects to nominate for AHP grants as, “whether it’s a new project or an existing one that needs support, let’s help wherever we can.”

In 2014 Bank of American Fork was one of only 41 banks in the country that received an “outstanding” rating for community reinvestment from the Federal Deposit Insurance Corporation. The examination included a thorough look at the bank’s involvement in community-development lending compared to peer banks, low-to-moderate income loans compared to peer banks, the amount of community-development contributions to qualified organizations and the number and volume of employee hours spent serving in community-development organizations.

These programs work because of the people. People are behind all of the mechanisms that are building our communities, piece by piece. The people building their own homes, who, like Jan Farr, might come in a little unsure of their abilities, but come out very able and confident. People like Brad Bishop and Karen Weatherspoon at Self-Help Homes who run the program, find potential homeowners and show them they can build a safe and beautiful home. And then there are people like Bill Swadley, Gary Sell and others at Bank of American Fork who are passionate about reinvesting in the community.

With so many people who want to see Utah’s communities grow and the people prosper, Jane Farr was right when she said, “With courage, persistence and determination, you can win.”

 
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