CEO Kenneth Arnold’s Association Financial Services lends money to cash-strapped condo and homeowners associations.

As the economy has put the squeeze on homeowners, more have opted not to pay their condo or homeowners association fees. That’s presented a business opportunity for Miami-based Association Financial Services, which lends money to associations and helps them collect unpaid assessments.

The company has grown quickly since its founding in 2006 and caught the eye of Orlando-based Florida Mezzanine Fund, which gave it an undisclosed infusion in March.

Association Financial was founded by two pairs of brothers: CEO Kenneth Arnold, Chief Operating Officer Jonathan Arnold, Chief Financial Officer Alex Moskovitz and Chief Information Officer Ram Moskovitz. They knew they’d be operating a niche company, working largely with distressed community associations, and expected to grow slowly. Then the real estate crash and recession hit, and Association Financial found itself with many customers. It rapidly expanded across Florida throughout 2009.

To keep growing, the 15-employee Association Financial needed money to lend to associations, and banks aren’t extending much credit. Kenneth Arnold says the money from Florida Mezzanine will allow it to grow outside of Florida by the end of the year.

Association Financial customers typically have a 15% to 30% delinquency rate. They use a loan from Association Financial — which charges higher interest rates than banks — to make repairs or get their books in order. Sometimes, this is enough to start owners paying again, as units become more rentable, salable or more pleasant to live in. If that doesn’t work, Association Financial may send the case to an attorney, go to collections, work out a payment plan, rent out the unit or use other methods.

Some 20% of Florida’s population lives in communities with associations, and Kenneth Arnold says Association Financial can be a lifeline to the associations, which find bank loans almost impossible to get right now. “As a non-profit, you have to maintain very lean operations, and they’re not necessarily equipped to manage in downturns like this,” he says. “Sometimes, you need money to be able to right the ship.”