Six community banks have received a total of $123 million as part of the first wave of capital provided by the Small Business Lending Fund, according to the Treasury Department.
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The SBLF, which was established as part of the Small Business Jobs Act that President Obama signed into law, encourages community banks to increase their lending to small businesses, helping those companies expand their operations and create new jobs.
“Expanding access to credit for small businesses will provide a powerful spark for growth and job creation,” Treasury Secretary Tim Geithner said in a statement last week. “These funds will help ensure that more Main Street entrepreneurs have the opportunity to expand their businesses, invest in their local communities, and create new jobs.”
Small businesses play a critical role in the U.S. economy and are central to growth and job creation. Small businesses employ roughly one-half of all Americans and account for about 60 percent of gross job creation. But small business owners faced disproportionate challenges in the aftermath of the recession and credit crisis, including difficulty accessing capital.
The SBLF helps small businesses meet this challenge by providing capital to community banks that hold under $10 billion in assets. The dividend rate a community bank pays on SBLF funding is reduced as that bank increases its lending to small businesses— providing a strong incentive for new lending to small businesses so they can expand and create jobs.
The six community banks that received funding through the first wave of SBLF capital include:
• Community Trust Financial Corporation (Ruston, La.) – $48.3 million
• Level One Bancorp, Inc (Farmington Hills, Mich.) – $11.3 million
• Pioneer Bank, SSB (Drippings Springs, Texas) – $3.0 million
• ServisFirst Bancshares Inc. (Birmingham, Ala.) – $40.0 million
• U&I Financial Corp (Lynnwood, Wash.) – $5.5 million
• Virginia Heritage Bank (Fairfax, Va.) – $15.3 million
Additional SBLF funding announcements will be made on a rolling basis in the weeks ahead, according to the Treasury Department.