By Clarissa Kell-Holland, Land Line staff writer
The terms and guidelines for the new U.S. Treasury’s Small Business Lending Fund have finally been released – eight months after the program was rolled out. All of the community banks the U.S. Treasury’s Small Business Lending Fund was designed to aid now have the terms and guidelines they need to apply for the $30 billion in capital.
Although there isn’t much time to apply, late Thursday, May 12, the Treasury published the terms for Subchapter S corporations and mutual institutions. The application deadline is June 6.
So far, more than 600 C corporations have been able to apply for more than $8.7 billion, but until Thursday, there were no terms for S corporations. The deadline for these C corp. community banks is still Monday, May 16.
But the clock is ticking because the Treasury’s SBLF has only a one-year authorization, set to expire in September, and none of the money has been disbursed so far.
According to Paul G. Merski, senior vice president and chief economist for the Independent Community Bankers of America, 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 told Land Line recently. “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.
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