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Treasury Notes

 Small Business Lending Fund: Creating $5.2 Billion (and counting…) in Additional Capital for Small Business Owners

By: Don Graves
7/9/2012

Treasury’s Small Business Lending Fund (SBLF) was created to help small businesses access the capital they need to create jobs and expand operations. Treasury today sent Congress a new report with strong evidence that SBLF is doing just that. Specifically, Treasury’s SBLF Use of Funds report demonstrates that, as of the end of the first quarter of 2012, banks and community development loan funds (CDLFs) participating in the SBLF increased their lending to small businesses by $5.2 billion—representing a $433 million increase over the last quarter of 2011.

These loans—such as one loan for new glass recycling equipment for a bottling company in Montana and loans for family farms in Florida—are supporting hundreds of small businesses and local economies across the nation.

 

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Established by the Small Business Jobs Act of 2010, the SBLF is a dedicated investment fund that encourages lending to small businesses by providing capital to qualified community banks and CDLFs with assets of less than $10 billion. Through the SBLF, participating Main Street lenders and small businesses can work together to help create jobs and promote economic growth in local communities across the nation.

In this latest report to Congress, Treasury demonstrates that business lending by banks participating in the SBLF is far outpacing lending by similar financial institutions that do not. SBLF banks have increased business lending by substantially greater amounts than a comparison group of non-SBLF banks across median measures of size, geography, and loan type. SBLF banks increased business lending by a median of 22.2 percent, versus a 1.9 percent median decrease for the comparison group of non-SBLF banks. In addition to increasing business lending, SBLF banks increased other types of lending by a median of 10.9 percent over baseline levels, versus a median decrease of 4.7 percent among the group of non-SBLF banks.

Changes in Business Lending and Other Lending
(Reported as of 1Q 2012)

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In each region of the country, SBLF banks reported median increases in business lending while the comparison group of non-SBLF banks reported median decreases or no change in business lending. The following graph compares median changes in business lending by SBLF banks with the comparison group of non-SBLF banks across four regions.

Changes in Business Lending by Regional Geography
(Reported as of 1Q 2012)

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Community banks and CDLFs understand their local economies best and are well-situated to support businesses created and managed by their neighbors. The Obama Administration continues to support innovations that result in small businesses having the tools they need to succeed. The SBLF continues to be one strong part of the Administration’s support for small businesses in communities across the country, and I expect continued positive reports in the future.

For more information on the SBLF, click here. To read the full Use of Funds report, click here

Don Graves is Deputy Assistant Secretary for Small Business, Community Development, and Housing Policy.

 

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Posted in:  /Resource Center/Small Business Programs/Small Business Lending Fund
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