WASHINGTON — Twenty small banks will receive a total of $253 million in the latest round of funding from the Small Business Lending Fund, according to the Treasury Department.
The $30 billion fund was established by Congress last year as a way to increase lending from small banks to small businesses. The fund offers capital to eligible community banks with under $10 billion in assets. As the recipient banks increase their small-business lending, the dividend rate they pay back to the federal government will decrease.
So far, the Treasury Department has announced the distribution of $590 million to 43 community banks. In a press release, Treasury said that it will make additional funding announcements in the coming weeks.
Of the 20 banks that received money in the latest round of SBLF funding, 15 were recipients of funds from the Troubled Asset Relief Program. The SBLF is open both to banks that did and did not receive Tarp funds. For some Tarp recipients, the new program allows a way to refinance their earlier borrowing on more favorable terms.
The largest recipients announced in the latest round of funding were Liberty Bancshares, Inc., of Jonesboro, Ark., which will receive $52.5 million; Medallion Bank of Salt Lake City, Utah, which will receive $26.3 million; and Centrix Bank & Trust of Bedford, N.H., which will receive $24.5 million. All three banks were Tarp recipients.
