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Small Business Lending Fund

Issue

The Small Business Jobs Act of 2010 was enacted on September 27, 2010, and created the Small Business Lending Fund (SBLF). The SBLF authorizes the U.S. Treasury Department to invest up to a total of $30 billion in institutions with assets below $10 billion that meet certain supervisory conditions and that present an acceptable small business lending plan.

Position Statement

The ABA has been instrumental since 2009 in seeking additional opportunities for banks, particularly community banks, to obtain additional capital during the current economic environment when sources of capital for community banks have been scarce. As far back as September 21, 2009, the ABA urged the Treasury Department to modify or support federal government programs to make capital available to assist well-managed, viable community banks. One of the vehicles for achieving such a goal is through the use of this new Small Business Lending Fund. ABA supports these legislative and regulatory efforts to make new capital available to banks that commit to expand lending to small businesses.

Explanation

Treasury has authority to make investments from the SBLF until September 27, 2011. The deadline for banks to apply for the SBLF is generally March 31, 2011. However, not all term sheets are yet available. Term sheets have not yet been released for S corporations, mutual institutions, or community development loans funds. Thus, these types of entities will have a later application deadline. Treasury stresses that Boards of directors of institutions that participate in the SBLF Program should ensure that small business lending policies are consistent with the safe and sound lending practices outlined in the banking agencies' interagency guidance. That guidance, along with materials provided by Treasury and FAQs prepared by ABA staff, is available below.

Additional Resources

Contact for further information: James Ballentine (202) 663-5359 or Cathy McTighe at (202) 663-5331.