The U.S. Department of the Treasury (Treasury) recently announced the latest round of funding via the Small Business Lending Fund (SBLF), with an additional 50 community banks receiving $767 million in SBLF funds.
In total, 130 community banks have received more than $1.8 billion in SBLF funding and, in its announcement, Treasury promised further funding announcements would be made in the coming weeks.
The SBLF fund was created in September 2010 when Congress passed and President Barack Obama signed into law the Small Business Jobs Act. In December 2010, NSBA joined Sens. Mary L. Landrieu (D-La..), chair of the U.S. Senate Committee on Small Business and Entrepreneurship, and George LeMieux (R-Fla.), in calling for the swift implementation of the SBLF and the State Small Business Credit Initiative, which also was created by the Small Business Jobs Act.
In total, 932 community banks applied for $11.6 billion in SBLF funding. A recent report revealed that approximately two percent of these banks eventually withdrew their applications. Treasury would not divulge the reasons cited for these withdrawals, but some of the banks attributed them to restrictions in the program they deemed worrisome.
At least one bank identified how Treasury defined a qualified business loan as the rational for its withdrawal, specifically the restriction barring the government-guaranteed portion of U.S. Small Business Administration loans as counting as new lending activity. Treasury imposed this condition, however, to prevent banks from utilizing one government source of funds to finance another. Other banks cited lack of loan demand or increased capital on hand as the reasons for their application withdrawal.
Please click here to see a complete list of the 50 community banks receiving funds.