Weak Demand, Rules Crimp U.S. Small Business Lending Fund

A U.S. Treasury Department program to stimulate job growth by injecting $30 billion into banks for small-business lending has disbursed just $2.4 billion, with lenders and industry groups saying it fell victim to the sputtering economy and overly stringent rules.

President Barack Obama praised the Small Business Lending Fund last year as key to his efforts to create jobs by ensuring credit-starved companies got the loans they needed to expand. The program, which ends Sept. 27, rewarded qualified community banks with funding that cost as little as 1 percent if they boosted small-business loans by 10 percent or more. Treasury said it had given preliminary approval to $4.3 billion of the investments.