Treasury Notes

 $253 Million for 20 More Community Banks

By: Erika Gudmundson
8/4/2011

Small businesses employ roughly one-half of all Americans and account for about 60 percent of gross job creation. But small business owners faced disproportionate challenges in the aftermath of the recession and credit crisis, including difficulty accessing capital. To help address that issue, the Small Business Lending Fund (SBLF) encourages community banks to increase their lending to small businesses, helping those companies expand their operations and create new jobs. 

Here’s how the program works. The SBLF provides capital to community banks that hold under $10 billion in assets. The dividend rate a community bank pays on SBLF funding is reduced as that bank increases its lending to small businesses – providing a strong incentive for new lending to small businesses so they can expand and create jobs.

As part of its next wave of SBLF funding, Treasury announced yesterday that 20 community banks across the country received a total of $253 million – meaning in total, the program has given a $590 million in funding to 43 community banks.

A number of the banks receiving funding as part of yesterday’s announcement told their local newspapers what the program would mean to their communities and small business owners.

Todd Adams, CEO of Adams Bank in Ogallala, NE, told the Omaha World-Herald that "this is a way to put capital back into strong banks so that they will expand their lending. We want to make sure we are able to meet the credit needs of the borrowers in our area. We want to make loans available to businesses so they can expand and keep the economy moving."

"In a nutshell, what it does for us is allow us to continue to grow and support what has been the major engine of our growth — small businesses in the communities we operate in," said Bob Rupel, president and CEO of Team Capital Bank in Bethlehem, PA which received $22.4 million.

George Cummings, President of Progressive Bank of Monroe in Louisiana which received $12 million, told the News-Star: "Our stated purpose is to help people achieve their dreams, and our participation in this program, and the $12 million awarded to our bank, offers us greater opportunity to do just that for our commercial customers."

And because small businesses play a critical role in the U.S. economy and are central to growth and job creation, additional SBLF funding announcements will be made on a rolling basis in the weeks ahead. 

Posted in:  Small Business Lending Fund
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