Seventeen community banks that include Monument Bank in Doylestown have received $214 million in new capital from U.S. Treasury’s small business lending fund. This is a $30 billion asset that will provide capital to community banks. Qualifying banks are those with less than $10 billion in assets.
Tier -1 qualifying capital is being provided by the fund through preferred stocks and equivalents. Banks provide 5 percent dividends on stocks but then that can decline to 1 percent only if banks increase small business lending by 10 percent.
An estimated $3 million new capital will be received by Monument. John Soffronoff, the bank’s CEO conveyed that the fund shall help Monument to market small-business lending programs. Recently, two new loan officers were hired and they have opened an office in Newton. This is all in anticipation of getting this money.
The treasury has announced that three other Pennsylvania banks have received funds. This includes Centric Financial Corp. of Harrisburg, $7.5 million, York Traditions Bank, $5.1 million and Phoenix Bancorp Inc. of Minersville, $3.5 million. Other banks receiving funds are in states of Alabama, Colorado, California, Florida, Kansas, Michigan, Maryland, Ohio, Texas and Utah.
The small business lending fund has made $337 million available to 23 community banks. Team Capital Bank of Bethlehem has received preliminary approval of $22 million from the fund. The funds really allow small and mid sized companies to grow continuously the reason for which is communities are being supported by banks.
This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to