Published April 10, 2012
South Carolina banks have increased their small business lending by $50.5 million since receiving capital through Small Business Lending Fund, according to a report released Monday by the U.S. Department of Treasury.
President Obama signed the Small Business Jobs Act into law in 2010, establishing the Small Business Lending Fund, which encourages community banks to increase lending to small businesses to boost growth and job creation.
Institutions participating nationwide in the fund significantly increased small business lending in the fourth quarter of 2011 by $1.3 billion from the third quarter — for a total of $4.8 billion over their baseline.
“This report shows that the Small Business Lending Fund is having a powerful impact,” said Deputy Secretary of the Treasury Neal Wolin. “The program is helping spark new lending to local entrepreneurs looking to invest in their businesses and create new jobs.”
The fund helps small businesses gain access to capital by providing it to community banks that hold under $10 billion in assets. The dividend rate a community bank pays on this funding is reduced as that bank increases its small business lending, incentivizing lending to small business.
Small businesses employ roughly one-half of all Americans and account for about 60% of gross job creation. Through the Small Business Lending Fund, The U.S. Department of Treasury invested more than $4 billion in 332 institutions in 48 states.