The ‘State Small Business Credit Initiative’ is yet another program announced by the US Treasury so as to make funds available to banks, in-order, to help them lend out to small businesses. A total of $360 million has been made available to banks in 11 states. The states have been successful in demonstrating that banks are capable of generating $10 in new private lending for every dollar that it accepts from the program.
The fund is meant to support state-level programs meant to expand small business lending and help in the growth of private-sector jobs. The local communities will also receive a significant impetus as credit will get released to small businesses and it will ultimately lead to investment and job creation.
The money granted is a form of loan to banks based on which interest rate falls and banks are able to make more loans. It also acts as an incentive and inspires banks to take new risks and make more loans with the treasury funds. More than 6,000 independent banking institutions have joined the program. The reason for this is with the increase in savings rate, banks are left out with more to lend.
A survey of 350,000 independent businesses has revealed that only 8 percent of businesses have really complained about non-receipt of credit they needed in July.
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 firstname.lastname@example.org