Small Businesses are Bringing in the Dough in Tennessee and Beyond

The U.S. Department of the Treasury today released a new report showing that, nationwide, participants receiving capital through the Small Business Lending Fund (SBLF) boosted small business lending by $11.2 billion over baseline levels and $819 million over the prior quarter. The reported aggregate lending increase represents an estimated 51,700 additional loans to small businesses according to earlier loan data from SBLF’s First Annual Lending Survey.  In Tennessee, SBLF participants have increased their small business lending by $518.3 million, also over baseline levels, including a $99.2 million increase in the third quarter of 2013.

Small businesses play a critical role in the U.S. economy and are central to growth and job creation.  In the aftermath of the recession and credit crisis, small business owners faced significant challenges, including difficulty accessing capital.

“The Obama Administration’s Small Business Lending Fund is supporting Tennessee community banks as they work with local small businesses to fuel our economic recovery,” said Treasury Under Secretary for Domestic Finance Mary J. Miller. “Today’s report shows that the SBLF continues to create more opportunities for American entrepreneurs to turn their good ideas into successful, growing businesses.”

SBLF banks have now increased business loans outstanding by a median of 52 percent over baseline levels, versus an 11 percent median increase for a representative peer group of similar banks. Increases in small business lending are widespread across SBLF participants, with 93 percent of participants having increased their small business lending over baseline levels. Most participants report that their small business lending increases have been substantial, with 90 percent increasing small business lending by 10 percent or more.

The SBLF program, established as part of the Small Business Jobs Act that President Obama signed into law in 2010, encourages community banks to increase their lending to small businesses, helping those companies expand their operations and create new jobs.  Treasury invested more than $4 billion in 332 institutions through the SBLF.  Collectively, these institutions operate in more than 3,000 locations across 48 states.  This report includes information on the 307 institutions that continued to participate in the program as of October 31, 2013, including 257 community banks and 50 CDLFs.

SBLF encourages lending to small businesses by providing capital to community banks and CDLFs with less than $10 billion in assets.  The dividend or interest rate a community bank pays on SBLF funding is reduced as the bank increases its lending to small businesses – providing a strong incentive for new lending to small businesses so that these firms can expand and create jobs.  Individual community banks can reduce the rate they pay to one percent if they increase qualified small business lending by 10 percent over their baseline. As established in the Act, the baseline for measuring the change in small business lending is the average of the amounts that were reported for each of the four calendar quarters ended June 30, 2010.

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To view the report, including a list of the change in lending at banks receiving SBLF capital, please click here.

The SBLF program is one part of the Obama Administration’s comprehensive agenda to help small businesses access the capital they need to invest and hire. For more information on the Obama Administration’s small business initiatives, please visit www.sba.gov.  For more information on SBLF, please visitwww.treasury.gov/smallbusiness.

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