Montgomery County in Maryland is teaming up with five local banks on a new program designed to encourage more bank lending to small businesses.
Under the Small Business Plus program it unveiled Friday, the county will deposit $10 million into five Montgomery County banks, which the banks will then parlay into $20 million of loans to local businesses. The program, modeled after similar programs adopted by state and local governments in other states. Is expected to take effect early this month
"We have a number of strong community banks headquartered in Montgomery County and it makes good sense to partner with them to generate jobs and business that benefits county residents and, at the same time, broaden the County's tax base," Montgomery County Finance Director Joseph Beach said in a news release Friday.
To be eligible, banks in the county must be based there and have assets of between $200 million and $5 billion of assets. They also must agree to originate the loans within a year of receiving the deposits.
Currently, more than 90% of the county's funds are deposited at PNC Bank, a unit of PNC Financial Services Group (PNC), the Washington Post reported Monday.
The banks participating are: the $392 million-asset OBA Bank in Germantown; the $368 million-asset Capital Bank in Rockville; the $2.8 billion-asset Eagle Bancorp (EGBN) in Bethesda; the $317 million-asset Congressional Bank in Potomac; and the $384 million-asset Monument Bank in Bethesda.