Obama Administration’s SBLF lending program launched to set in flow of cash to small banks will result in a profit of $80 million though Americans anticipated that it would cost tax-payers $1.3 billion. But then this is not all good news for Congress as the Treasury Department’s Small Business Lending Fund could only help fewer banks than expected.
President Obama’s attempt to pump capital in small firms ended up with disbursement of just $4 billion of the $30 billion SBLF. Out of 7000 community banks only 933 actually applied. Treasury’s reason is banks are not healthy enough to qualify and weaker small business loan demand.
But, some small business leaders and banks hold a different opinion. They say that government officials were too stringent for banks and that there was trouble in navigating the application process.
Banks have said how they are going to use taxpayer money to lend out to small businesses. If the treasury accepts bank’s plan, it would be in a position to spur lending and infuse more capital to banks so as to lend out to small businesses.
Most of the banks are saying that they are continuing to make loans available under the SBLF program. There is a word around that the $4 billion infusion would ultimately result in $32 billion in lending.
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