Wednesday, January 8, 2014

Community Banks Increased Small Business Lending

Community banks and community development loan funds (CDLFs) participating in the Small Business Lending Fund (SBLF) have increased their small business lending by $11.2 billion over the 2010 baseline, with $819 million of the increase occurring in the 3rd quarter alone. Lending increases were widespread amongst the participants: 93% of participants increased their small business lending since 2010 and 90% reported increases of 10% or more.

In the aftermath of the recession, small businesses encountered financing difficulties. The SBLF was created by the Small Business Jobs Act of 2010 to help support small business lending by investing capital in community banks using an innovative dividend or interest rate incentive structure designed to encourage responsible increases in lending. The report showed that the SBLF participants did in fact bolster the flow of credit to businesses by more than their counterparts, with participating banks increasing business loans by a median of 52% over baseline levels.

Read the report.

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