After the launch of Small Business Lending Fund (SBLF), it became necessary to check its success. So, the Treasury department conducted a survey to get an in-depth understanding of success and shortcomings of the SBLF.
As per the findings of the report, SBLF has been a success for Fed. Treasury reported that SBLF increased small business lending to community banks by 70 percent. This spurred in community development loans for business organizations.
Small business lending increased 10 percent from community banks. It is evident that the SBLF recipients found more funds as their lending increased to $433 million during first quarter of 2012. Community banks that received SBLF money increased business lending by $5.1 billion. However, the banks that did not get SBLF funds showed decline of 1.9 percent in lending.
It is true that a part of the SBLF money has been used by banks to repay their TARP debts. But then an overwhelming percentage increase in Small Business Lending has also occurred. Community banks lending to small businesses increased 13 percent since 2010.
Findings of treasury survey reveal that SBLF program is a success in getting small business lending done by banks that received it. However, the shortcoming remains that just 281 community banks could find funds. Money also went to 51 community development loan funds. But the treasury could not give out the $30 billion SBLF capital and managed to disburse only $4 billion to banks for small business loans.
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