By Clarissa Kell-Holland, Land Line staff writer
Nearly seven months have passed since Congress passed legislation designed to get $30 billion in cash flowing into the hands of small-business owners.
And the clock is ticking. That’s because the U.S. Treasury’s Small Business Lending Fund program has a one-year authorization, set to expire in September, and none of the money has been disbursed so far.
The deadline has been extended to May 16 to apply for funding through the SBLF. So far, only 600 C corporation community banks in the U.S. have applied for approximately $8.7 billion of the $30 billion in funding.
About one-third of the community banks the program is designed to help still haven’t received the applications or terms to apply for the program, according to Paul G. Merski, senior vice president and chief economist for the Independent Community Bankers of America.
“The Treasury just hasn’t put together the correct terms and application for the Subchapter S corporations, which is a little more complicated than for the C corps,” Merski said. “There is plenty of capital available to interested banks. It is frustrating that all of the banks that are interested still don’t have the paperwork or applications they need to access that capital.”
He said the SBLF was designed to reach small-business borrowers that do about “60 percent of all of the small-business loans under $1 million.”
“This is specifically targeted for community banks of $10 billion and under in asset size,” Merski said. “The community banks have put in their small-business lending plan, they have small-business lending opportunities, and they want to leverage this capital from the Treasury.”
The intent was that the $30 billion fund could lead to $300 billion in lending because there are incentives for banks to lend this money once they borrow it from the Treasury.
“What we are hearing is that the Treasury needs two more weeks, but if the interested community banks don’t have the paperwork or applications by Sept. 27, then the program won’t work as intended,” Merski said.
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