Cantwell: Swift Implementation of Small Business Lending Fund Crucial to Job Growth

Application materials for Cantwell-sponsored program released today; community banks should apply by March 31, 2011

WASHINGTON, D.C. – Today, U.S. Senator Maria Cantwell (D-WA) said the new Small Business Lending Fund (SBLF) will help increase small business lending and accelerate job growth. The terms and application process were announced today by the U.S. Department of the Treasury, which will administer the Fund. Cantwell urged community banks seeking to lend to sound small businesses to apply by the March 31, 2011, deadline. Today’s announcement comes after a letter Cantwell wrote to Treasury Secretary Timothy Geithner on December 7th urging speedy implementation of the Fund and of the State Small Business Credit Initiative. Both programs were created as part of the recently-enacted Small Business Jobs Act to encourage small business growth through increased access to lending capital. Cantwell, a member of the Senate Small Business Committee, was a leading advocate of the fund and the overall bill.
“Increasing access to capital is the key ingredient our small businesses need to start investing, growing, and hiring again,” Senator Cantwell said. “I commend the Treasury Department for moving quickly to set up the Lending Fund to get job-producing lending capital flowing to the local banks and businesses who know how to put America back to work. I encourage community bankers and small business owners in Washington state to take advantage of this Fund.”
Under the SBLF, community banks with assets of $10 billion and under can access financing from the Treasury at attractive rates, bolstering community bank capital levels so that they can increase lending to small businesses. Banks that show significant increases in small business lending – loans of $10 million or less to businesses with revenues of $50 million or less – can access SBLF funding at rates as low as one percent. Full program details and application materials are available from the Treasury department at www.treasury.gov/SBLF.
Cantwell was instrumental in winning passage of the SBLF during Senate floor debate, and in her work on the Small Business and Finance Committees. Proposed by President Obama in his 2009 State of the Union Address, the Lending Fund will leverage a $30 billion public investment into up to $300 billion in private-sector lending to credit-worthy small businesses through sound community banks with under $10 billion in assets. The Congressional Budget Office says the Fund will actually reduce the federal deficit by $1.1 billion over ten years as banks repay the investment. Cantwell fought to create the Fund in response to the seizure of credit markets caused by the Wall Street meltdown that prevented even thriving businesses from accessing capital.
The State Small Business Credit Initiative (SSBCI) provides $1.5 billion in grants to support at least $15 billion in new small business lending through already successful state run programs. Many of these state run programs are facing cutbacks due to budget shortfalls and this initiative will allow states to build upon successful models for state small business programs. On October 8th, it was announced by the Treasury Department that Washington’s funding allocation is $19.7 million, which Treasury expects will result in about $197 million in new lending. Applications for the SSBCI are due on June 27, 2011. Washington state has already announced its intention to apply for funding under the Initiative. 
To learn more about Senator Cantwell’s efforts to help small business recover from the economic downturn, click here.