As a campaign promise, State Treasurer Steven Grossman has committed to move $100 million of state’s short term deposits to Massachusetts banks. This promise is made to increase lending to small businesses.The treasurer’s ‘Move Money program’ is aimed to increase lending in Massachusetts especially in Worcester and similar Gateway cities.Economic development of former mill towns remains a target.
In Massachusetts, it is found that many banks currently have the ability to lend money. Daniel Forte, president of the Massachusetts Bankers Association stated recently. Forte says that the problem is less demand for loans from recession stricken businesses.There will be more than enough interest from banks in-order to get the program going. The initial starting amount will be $100 million but even that is going to be flexible.
As far as the program is concerned, Grossman is in discussions with banks and has assured that local banks have witnessed a surge in loan demand and are having a better control over market share as they have started to gain market share and over shares from larger competitors.
Worcester-based Commerce Bank is one bank that reports money to be lent. Its President conveyed that last year business increased due to an increase in availability of commercial loans by nearly 15 percent. Thomson has made clear his positive intensions and said that he plans to meet in early March with Grossman and Worcester officials, in-order, to discuss the details.
In the fiscal year 2011, lending soared in Massachusetts as small business loans increased 12.2 percent as compared to $9.8 billion over the same period in 2010. The idea behind moving state funds back into Massachusetts banks is that flow of money can be used for economic development and grant of small business loans.
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to