Millions Still Flowing to Banks from Business Lending Fund
At a time when credit unions are fighting hard to gain support to expand their business lending authority, banks continue to reap the benefits of a small business lending fund.
The Treasury Department recently released a report that showed New Jersey banks, for instance, have increased their small business lending by $127 million since receiving capital through the Small Business Lending Fund.
The SBLF was established as part of the Small Business Jobs Act to encourage community banks to increase their lending to small businesses to help them grow and create new jobs.
The Treasury said it has invested more than $4 billion in 332 institutions, located in more than 3,000 communities in 48 states, through the SBLF. Nationwide, institutions participating in the SBLF significantly increased small business lending in the last quarter of 2011 by $1.3 billion over the prior quarter for a total of $4.8 billion over their baseline, the agency said.
The SBLF helps small businesses meet this challenge by providing capital to community banks that hold under $10 billion in assets, according to Treasury.
Meanwhile, legislation that would increase the MBL cap from 12.25% of assets to 27.5% is set to go before the Senate possibly this week. Over the past few days, trade groups, leagues, credit unions as well as small business owners have turned up the heat on encouraging Congress to raise the cap.