After months of waiting for their turn, Subchapter S corporations will get their chance to apply for capital infusions from the Treasury Department's Troubled Asset Relief Program.
A term sheet outlining how S Corps can receive capital from the Treasury is expected to be posted today on the Treasury's Web site, Neel Kashkari, the department's interim assistant secretary for financial stability, said Tuesday in a speech at Georgetown University.
The application period will commence immediately and will remain open for 30 days, Mr. Kashkari said.
A term sheet for mutual thrifts is still in the works.
Roughly 2,500 banks in the country are structured as S Corps. Referred to as S Corps because of where their structure is outlined in the Internal Revenue Services Code, they differ from other companies because their ownership is limited to 100 shareholders.
The banks' participation in the Treasury's Capital Purchase Program has been delayed, because they cannot issue preferred stock, and the Treasury has been working to come up with a viable alternative.
Of the 1,600 S Corps that are regulated by the Federal Deposit Insurance Corp., 400 have submitted applications for the Treasury program.
Neither the Office of the Comptroller of the Currency nor the Office of Thrift Supervision would disclose the number of S Corps they regulate that have submitted applications.
