A new report from the U.S. Department of the Treasury shows that five Utah financial institutions participating in its Small Business Lending Fund have seen loans increase by more than $127.7 million since the program was launched in mid-2010.
Lending at community banks through the SBLF was up 32 percent, compared with an increase of 5.7 percent among those not involved in the program.
The jump in lending has improved “access to capital for thousands of small and family-owned businesses across the country,” Deputy Treasury Secretary Neal Wolin said in a statement.
Participating lenders in Utah are Cache Valley Bank, Logan; Continental Bancorp, Salt Lake; Medallion Bank, Salt Lake; LCA Bank Corp., Park City; and W.T.B. Financial, American Fork.
The SBLF was established as part of the Small Business Jobs Act that President Obama signed into law in 2010. It was set up to encourage lending to small businesses by providing capital to community banks and to community development loan funds with less than $10 billion in assets. As a result, the Treasury Department provided more than $4 billion in capital to 332 participating institutions.
The dividend or interest rate a community bank pays on SBLF funding is reduced as the bank increases its lending to small businesses, a provision that was designed to provide a financial incentive to the participating financial institutions to increase their lending activity.