Today, U.S. Senator Maria Cantwell (D-WA) announced that two Washington state community banks are receiving capital from the Small Business Lending Fund (SBLF). Peoples Bancorp of Lynden and Puget Sound Bank of Bellevue are receiving $18 million and $9.9 million, respectively, to help expand access to lending capital for small businesses looking to grow their operations.
Cantwell, a member of the Senate Small Business and Finance committees, was instrumental in winning passage of the fund to encourage small business growth through increased access to lending capital. The fund became law last September as part of the Small Business Jobs Act, which Cantwell played a lead role in authoring and championing.
One other Washington state community bank has received capital through the fund: U&I Financial Corp of Lynnwood received $5.5 million from the first wave of SBLF capital released on July 7th. U&I Financial Corp has stated that as a result of the SBLF capital, it will be able to increase its loans to small businesses by 10 percent.
"Small businesses are the engine of our economy and stand ready to drive us out of this recession," Senator Cantwell said. "The key ingredient to getting our small businesses investing, growing and hiring again is increased access to capital. That's why I fought hard for this fund so small businesses could have expanded opportunity to do what they do best -- create jobs and grow our economy. With the help of the Small Business Lending Fund, these two Washington state community banks will enable small businesses to drive growth in their communities."
Small businesses play a critical role in the U.S. economy and are central to growth and job creation. Small businesses employ roughly one-half of all Americans and account for about 60 percent of gross job creation. But small business owners faced disproportionate challenges in the aftermath of the recession and credit crisis, including difficulty accessing capital. Cantwell fought to create the Small Business Lending Fund in response to the seizure of credit markets caused by the Wall Street meltdown that prevented even thriving businesses from accessing capital.
Treasury Department Counselor Gene Sperling said at a September 2010 press conference that Cantwell was instrumental in winning passage of the lending fund: "Nobody pushed us harder to understand the connection between small banks and small business more than Maria Cantwell throughout."
Under the SBLF, community banks with assets of $10 billion and under were able to apply for 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. The Congressional Budget Office says the fund, which leverages a public investment of up to $30 billion into as much as $300 billion in private sector lending, will actually reduce the federal deficit over the next decade as banks repay the investment.
Additional SBLF funding announcement will be made on a rolling basis in the weeks ahead. For more details on the SBLF, please visit the Treasury department.
Since winning passage of the SBLF last September, Cantwell has urged the swift implementation of the fund to get lending capital flowing to small businesses that stand ready to create jobs. On December 7, 2010, Cantwell wrote a letter to Treasury Secretary Timothy Geithner urging speedy implementation of the fund. Shortly thereafter, on December 21, 2010, Treasury announced the terms of the fund and began accepting applications. Cantwell has consistently urged community banks seeking to lend to sound small businesses to apply.