At the Business Finance Lounge we like to report on anything that impacts small business owners and especially their ability to obtain working capital and small business loans. This report was released last week by the Office of the Special Inspector General. In one word it is, well, NotGood.
If you’re not familiar with the Small Business Lending Fund, here’s what their website says. “Established by the Small Business Jobs Act of 2010 (the Act), the Small Business Lending Fund (SBLF) is a dedicated fund designed to provide capital to qualified community banks and community development loan funds (CDLFs) in order to encourage small business lending.”
As the story goes the US Treasury Dept only invested $4 Billion of the $30 Million that Congress made available to them. Then, as the report points out, this money helped 137 banks to exit TARP.
In the report, SIGTARP Special Inspector General Christy Romero wrote, “former TARP banks in SBLF have not effectively increased small business lending and are significantly underperforming compared to non-TARP banks,”
The Bottom Line
That’s basically the bottom line, the TARP banks either did not increase their lending or they only slightly increased their lending by $1.13 for every dollar in SBLF funds they received. On the other hand, the non-TARP banks increased their lending by $3.45 for every dollar in SBLF funds.
If you’re looking for financing to start, build, or grow your business it’s good to start with knowing your options. Grab our 16 Most Common Ways to Get Money for your Small Business and then if you decide to go after bank financing then you may want to do some searches on Google, Yahoo, or Bing to see if your institution was a recipient of TARP funds. If they were then your chances of them treating your loan application any differently than pre-TARP it’s unlikely.
You may want to start your search with a recipient of SBLF funding who did NOT receive TARP funds. Either way, we’re here as a resource for you as well so let us know if we can answer any questions or be of assistance for you as you look for the funding you need. At LenCred, we’re passionate about helping you borrow money the RIGHT way!