WASHINGTON – The
U.S. Department of the Treasury yesterday released a new report showing that participants
receiving capital through the Small Business Lending Fund (SBLF) continue to
increase their small business lending, in total by $7.4 billion over the
baseline and by $740 million over the prior quarter. This Use of Funds
report represents the sixth consecutive quarter in which SBLF participants have
increased lending to small businesses and provides strong evidence that the
SBLF program is working as intended. Community
banks participating in SBLF have increased business lending by substantially
greater amounts than a peer group of similar banks across median measures of
size, geography, and loan type.
“Community banks participating in
the Obama Administration’s Small Business Lending Fund have consistently
increased small business lending over the past two years, resulting in
increased access to capital for thousands of small and family-owned businesses
across the country,” said Deputy Secretary of the Treasury Neal Wolin. “With the help of lending supported by SBLF,
these small businesses continue to grow and create jobs in their neighborhoods.”
Small businesses play a critical role in the U.S. economy
and are central to growth and job creation. In the aftermath of the recession and credit
crisis, small business owners faced disproportionate challenges, including
difficulty accessing capital.
The SBLF, established as part of the Small Business Jobs Act
that President Obama signed into law in 2010, encourages community banks to
increase their lending to small businesses, helping those companies expand
their operations and create new jobs. Treasury
invested more than $4.0 billion in 332 institutions through the SBLF. Collectively, these institutions operate in
over 3,000 locations across 48 states. This
report includes information on the 326 institutions that continue to
participate in the program as of September 30, 2012, including 275 community
banks and 51 community development loan funds, or CDLFs.
SBLF encourages lending to small businesses by providing
capital to community banks and CDLFs with less than $10 billion in assets. The dividend or interest rate a community bank
pays on SBLF funding is reduced as the bank increases its lending to small
businesses – providing a strong incentive for new lending to small businesses
so that these firms can expand and create jobs.
As of September 30, 2012, the average rate paid by community banks on
SBLF capital was two percent. Individual
community banks can reduce the rate they pay to one percent if they increase qualified
small business lending by 10 percent over their baseline.
To view the report, including a list of the change in
lending at banks receiving SBLF capital, please click here.
The SBLF is one part of the Obama Administration’s
comprehensive agenda to help small businesses access the capital they need to
invest and hire. Treasury also
administers the State Small Business Credit Initiative (SSBCI), which allocates
$1.5 billion to state programs designed to leverage private financing to spur
$15 billion in new lending to small businesses and small manufacturers.
For more information on the Obama Administration’s small
business initiatives, please visit www.sba.gov. For more information on SBLF, please visit www.treasury.gov/sblf.