The Small Business Lending Fund (SBLF) has been a success story of the Federal Government. The lending fund has given out $4 billion in capital to 281 community banks. Among the other recipients are 51 Community development loan funds (CDLFs). With incentives made available, this program helped to lend out small business loans to small enterprises operating in America.
The SBLF participants increased small business lending by $1.3 billion till fourth quarter of 2011 as compared to the third quarter. Banks and CDLFs increased lending by 10 percent or even more. This is according to the reports of US Treasury Department. Congress authorized Treasury to make $30 billion available as cheap capital to banks in-order to boost lending to small businesses. But banks could only end up with $4 billion in funds.
Many banks opined that they are not in need of more capital to increase small business lending while some banks got rejected by the Treasury itself. There is also a looming criticism that the SBLF funds were used to pay the TARP debts. So, the question arises is did the fund really help small businesses? Actually, it did as it is found that banks increased lending by 12.5 percent since mid-2010. It is also seen that banks not participating in SBLF also increased lending by 5.5 percent.
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 email@example.com