The U.S. Treasury Department again picked up its lending efforts this week, providing an additional $418 million to community banks to promote further lending to small businesses across the nation.
The Treasury announced on Wednesday through the Small Business Lending Fund (SBLF), established under the Small Business Jobs Act signed into law last year, it will extend funds to 37 community banks across the country. This funding round will bring the total amount of funds extended to banks across the country to more than $1.0 billion.
Oak Valley Bancorp of Oakdale, Calif., received the most funding this round at $13.5 million. Other banks to receive funds included Silvergate Capital Corporation of La Jolla, Calif., ($12.4 million), Summit State Bank of Santa Rosa, Calif.($13.8 million), BNC Financial Group Inc. of New Caanan, Conn. ($11.0 million).
“These funds will provide critical support to Main Street community banks so they can expand their lending to small businesses,” said Deputy Secretary of the Treasury Neal S. Wolin. “This program helps entrepreneurs in communities across the country access the capital they need to grow their operations, invest in new equipment, and hire additional workers.”
Additional funds are expected to be extended to more community banks on a rolling basis in the upcoming weeks.
The SBLF Fund—A Quick Recap:
For those unaware with what the SBLF, it’s a $30 billion fund that provides capital to community banks with assets of $10 billion or less. The aim of the fund is to promote job creation by encouraging community banks to make loans to small businesses. Profits paid out by the federal government on SBLF funds borrowed begin at 5% and are reduced as participating community banks expand their lending activities. Community banks that take funds through the SBLF program can exit the program by repaying funds they’ve been provided in addition to any dividends earned.
Earlier this month the fund extended $253 million to 20 community banks, while it also extended $214 million to 17 community banks in mid-July.