Small Business Lending Fund Gains Ground – At End
The Small Business Lending Fund, one of the major provisions of the Small Business Jobs Act that President Obama signed into law a year ago, seems to have finally picked up some steam. Since September 1, the U.S. Treasury Department has announced a total of 111 banks have received money from the fund to use to increase loans to small businesses. With the 80 that had already been approved, this brings the total to 191 banks around the country.
In the first round of funding, 50 banks received $767 million toward small business loans, it was reported on UPI.com. “These funds will provide a powerful incentive for community banks to expand their lending to small businesses, spurring new investment and job creation,” Deputy Treasury Secretary Neal S. Wolin said at the time.
On Wednesday, September 14, the Treasury made another announcement on the Small Business Lending Fund, saying that an additional 61 banks had been approved for $608 million.
This brings the total disbursed from the fund to over $2.4 billion, according to Reuters. The initial funding for the SBLF was $30 billion, however, and currently the Treasury only expects to approve another $1.9 billion before the program ends on September 27, 2011.
The Small Business Lending Fund was originally created to provide funds to banks under $10 billion as an incentive for them to lend to small businesses. However, many small banks decided that the requirements involved and the possibility of additional government oversight were not worth the small return they would actually see from being in the program. An additional problem was the continuation of strict requirements by federal regulators on requirements for loan applicants. Taken together, these have clearly dissuaded many banks from applying for the program.
What Washington seems to continue to ignore is that government intervention is not the best way to solve an economic crisis. Instead it tends to create additional layers of bureaucracy that require funding, which in turn requires either additional taxes or additional deficit spending – both of which increase the strains on the economy. It still is true that “that government is best which governs least.”
If you are a small business owner and are considering applying for funding to expand, buy commercial real estate, or for some other purpose, be sure to sign up for the two free reports on this site. If you are in the restaurant industry, or are considering buying a restaurant, watch the special video. With over thirty years in the lending industry, I have the knowledge, experience, and connections to help you through the process of applying for an SBA or other commercial loan.
Craig G. Francis is the owner of Francis Financial and The SBA Loan Store. He has been a top producer of SBA Loans since 1981, and has worked with Dun & Bradstreet and Bank of Commerce. Craig Francis has the expertise to steer clients through the often confusing rules and regulations associated with SBA Loans, having helped over 2,000 businesses acquire over a billion dollars in loans. He can be contacted through CraigGFrancis.com, SBALoanStore.com, onLinkedIn, or at 888-666-9722.
Category: Business
