The Small Business Lending Fund is living up to its billing.
A report from the U.S. Treasury shows that New York banks receiving money from the Small Business Lending Fund, set up as part of the Small Business Jobs Act that President Obama signed into law in 2010, have increased their lending to small business by $283 million since the program began.
The fund encourages community banks to lend more to small businesses in order to help them grow and create jobs.
Through the fund, the Treasury has invested more than $4 billion in 332 banks, which have a total of 3,000 locations across 48 states. Banks that take part in the SBLF program have boosted their lending to small businesses by $5.2 billion over the baseline, which is the average of all small business lending activity reported by banks taking part in the SBLF program for each of the four consecutive calendar quarters ending June 30, 2010.
“Today”™s report is more evidence that the Small Business Lending Fund is doing what the Administration intended it to do,” said Neal Wolin, deputy Treasury secretary. Â “Community banks are leveraging SBLF capital to support new lending to local entrepreneurs so that they can create and grow jobs in their neighborhoods.”
Small businesses employ half of all Americans and account for about 60 percent of all job creation. After the recession and credit crisis, small business owners faced many challenges, including access to capital. The SBLF provides capital to community banks with less than $10 billion in assets. Â The dividend rate a community bank pays on SBLF funding is reduced as that bank increases its lending to small businesses.
The SBLF is one part of the Obama Administration”™s plan to help small businesses get capital to invest and hire. The Treasury also administers the State Small Business Credit Initiative, which allocates $1.5 billion to state programs designed to leverage private financing to spark $15 billion in new lending to small businesses and small manufacturers.
