Federal funds aimed toward encouraging community banks to step up lending to small businesses have started to flow from Washington. US Treasury said the SBLF is going to invest $7.3 million in ‘Redwood Capital Bank’ located in Eureka, California.
The Treasury has also opined that it is going to invest $12 million in ‘Pacific Coast Bankers’ Bank’ that is a San Francisco specialty bank and it is known to support community banks everywhere in the country. It extends support to community banks spread across the country by providing services like cash management and processing of international payments.
President and chief executive of Redwood Capital, John Dalby, said the banks would use treasury funds to expand local investment in small business loans. It has goals for continued growth of economy of Humboldt County, California. The SBLF has $30 billion that enables it to purchase the much preferred stock from banks having less than $10 billion in assets. More banks are going to lend to businesses, their dividend payment to Uncle Sam is going to drop further.
The $30 billion fund got created by the Congress last September and it came as a victory for the Obama administration. The vote got split along party lines, and the Democrats kept prevailing. Republicans have started to compare the program to the 2008 bank bailout that made available $700 billion for creation of the Troubled Asset Relief Program.
The Federal Deposit Insurance Corp. has found that there are 121 banks and savings associations based in Los Angeles, Riverside, San Bernardino, Ventura, Orange counties that are having $10 billion in assets.
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