Treasury Approves $4.3 Billion for Small Business Lending Fund
The U.S. Treasury Department approved $4.3 billion for 382 financial institutions as part of its Small Business Lending Fund.
The Treasury has completed more than $1.8 billion in funding for 130 lenders, according to a department white paper obtained by Bloomberg News today. Of 932 applications received, more than 40 percent “failed to meet minimum statutory or program requirements and therefore could not be approved,” the Treasury paper said. Those requirements include size of the bank and whether it had missed dividend payments.
The small-business lending program was set up in September 2010 by Congress and the administration of President Barack Obama to provide low-interest capital injections to community banks that increase their lending to small businesses. The program permits them to use the new capital to refinance their Troubled Asset Relief Program debt.
The Obama administration has supported 17 tax breaks providing tax relief of more than $50 billion for small businesses, Don Graves, the Treasury’s assistant secretary for small business, wrote in a blog posting Sept. 2. Small businesses employ about half the workforce and account for 60 percent of gross job creation, Graves said.
Because banks leverage their capital, funding provided through the SBLF “will help increase lending to small businesses in an amount that is multiples of the total amount provided through these programs,” he wrote.
To contact the reporters on this story: Ian Katz in Washington at ikatz2@bloomberg.net; Cheyenne Hopkins at chopkins@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
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