Today, Congressman John Yarmuth (KY-3) announced that a community bank in Louisville has received $9.8 million in funding to make new loans to local small businesses, helping entrepreneurs access critically needed capital and create jobs. First Capital Bank of Louisville will receive the funding as part of the U.S. Department of the Treasury's Small Business Lending Fund (SBLF).
"Small business lending in Louisville and across the country has ground to a halt and that lack of capital is severely limiting the ability of these companies to invest and hire," said Congressman Yarmuth. "Small businesses create sixty percent of the new jobs in our country and this infusion of capital will help them do what they do best -- grow their companies and create local jobs."
In 2006, small businesses made up 99.7 percent of the firms in the nation, provided 50 percent of the employment, and 44 percent of the nation's private sector payroll. Small businesses were responsible for more than 2.6 million of the 3.6 million jobs created between 2002 and 2005.
The Small Business Lending Fund was enacted into law as part of the Small Business Jobs Act of 2010, which Congressman Yarmuth strongly supported. It provides capital to community banks that hold under $10 billion in assets. The dividend rate a community bank pays on SBLF funding is reduced as that bank increases its lending to small businesses, providing a strong incentive for new lending. Initially, the dividend rate will be no more than 5 percent. If small business lending increases by 10 percent or more, the dividend rate will fall to as low as 1 percent. Alternately, if small business lending does not increase in the first two years, the rate will increase to 7 percent. For more details, click here.
First Capital is part of the final round of SBLF funding, which includes $1.6 billion program to 141 community banks. In total, the program has provided more than $4 billion to 332 banks nation-wide.
Increasing the availability of capital for small businesses has been a priority for Congressman Yarmuth. He recently reintroduced the Give Credit to Main Street Act, which would direct the Small Business Administration to begin directly lending to small business owners.