Small business eager for loans can find loans from smaller banks as part of federal stimulus program that is aimed to provide a cheap source of funding. The government is able to counter strong criticisms in post-recession world. Big banks mostly received billions in bail-outs through Troubled Asset Relief Program or TARP.
Access to credit is required by small businesses if they want to start hiring again. Community bankers in Southwest Florida are witnessing merits of Small Business Jobs Act of 2010. The loan grant is $30 billion pool that can be leveraged into $300 billion. Community banks have been reluctant to lend loans nationwide. This happened being saddled with bad loans and being pressured by regulators.
A strong incentive for the program has also been laid to facilitate banks to make small business loans and to further stimulate the economy as stated by Charles Brown III, chairman and chief executive of Insignia Bank of Sarasota. Insignia has already applied for maximum 5 percent of its risk-based assets. This will be near to about $5 million.
Brown III, says, “If we took in $5 million, that could be leveraged to $50 million in 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