Treasury Announces Sale of Seven SBA 7(a) Securities

WASHINGTON – Today, the United States Department of the Treasury announced the sale of seven Small Business Administration (SBA) 7(a) securities executed through a Bid Wanted in Competition (BWIC) for approximately $58.0 million, which represents overall gains and income of approximately $1.3 million for those SBA 7(a) securities.  The closing date for the seven securities is expected to occur on or about October 24, 2011. 

 

SBA 7(a) securities are comprised of the portion of loans guaranteed by the Small Business Administration which finance a wide-range of small business needs, including working capital, machinery, equipment, furniture, and fixtures. 

 

Treasury originally invested in 31 SBA 7(a) securities with a value of approximately $368 million.  Those securities were comprised of 1,001 loans from 17 different industries, including retail, food services, manufacturing, scientific and technical services, healthcare, educational services, and others.  Treasury has now sold a total of 23 securities for approximately $271.7 million, representing overall income and gains of approximately $7.5 million.  After the closing, Treasury will continue to hold 8 SBA 7(a) securities. 

 

Treasury acquired its SBA 7(a) securities portfolio under the Troubled Asset Relief Program (TARP).  Treasury purchased the securities in order to help restart the flow of credit to small businesses.  Purchasing securities from participating "pool assemblers" enabled them to purchase additional small business loans from loan originators.  Since Treasury began purchasing SBA 7(a) securities, the SBA 7(a) market has recovered, as exhibited by new pool issuance volumes returning to pre-crisis levels. 

 

The disposition of these SBA 7(a) securities is part of Treasury's ongoing efforts to wind down TARP.  The Obama Administration will continue its strong commitment to ensuring that small businesses have the capital they need to create jobs and strengthen economic growth through the implementation of the Small Business Jobs Act and a number of other critical programs.

 

EARNEST Partners, which has acted as Treasury's Financial Agent for the SBA 7(a) securities portfolio, will continue to execute the securities disposition through broker-dealers on behalf of Treasury.  Prospective purchasers of SBA 7(a) securities held by Treasury should contact EARNEST Partners by e-mailing UCSBTeam@earnestpartners.com or by calling (404) 815-8772.

Sixty-One Additional Community Banks Across the Country Receive $608 Million to Help Small Businesses Access Capital, Create New Jobs

Total of 191 Banks Have Now Received More Than $2.4 Billion in Funding Through Small Business Lending Fund

WASHINGTON – Today, the U.S. Department of the Treasury announced that an additional 61 community banks across the country received a total of $608 million as part of the next wave of funding provided through the Small Business Lending Fund (SBLF). The SBLF, which was established as part of the Small Business Jobs Act that President Obama signed into law, encourages community banks to increase their lending to small businesses, helping those companies expand their operations and create new jobs.          

Including today’s announcement, 191 community banks have now received more than $2.4 billion in SBLF funding. Additional SBLF funding announcements will be made in the weeks ahead.

“There is no task more important than strengthening our economy and creating jobs, and this investment in small businesses across the country will help us achieve that goal,” said Deputy Secretary of the Treasury Neal S. Wolin.  “By incentivizing community banks to extend billions of dollars in much-needed credit to small businesses, the Small Business Lending Fund can spur growth and put Americans back to work in communities nationwide.” 

 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.

The SBLF helps small businesses meet this challenge by providing 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 to small businesses so they can expand and create jobs. For more details on the SBLF program, please visit, link and link.

The SBLF is one part of the Obama Administration’s comprehensive agenda to help small businesses access the capital they need to invest and hire. The State Small Business Credit Initiative (SSBCI), which is also a key part of the Small Business Jobs Act, allocates $1.5 billion to new and existing state programs that will leverage private financing to spur $15 billion in new lending to small businesses and small manufacturers. 

The Obama Administration has also supported 17 direct tax breaks that provide tax relief of more than $50 billion for small businesses. These tax breaks were designed to support job creation and retention, entrepreneurship, investment, and growth. The Administration has also worked with Congress to extend and expand existing Small Business Administration loan programs that helped put more than $42 billion in the hands of small businesses and deliver other important benefits to help small businesses expand and hire. 

U.S. Department of the Treasury Announces Funds to Spur $3.6 Billion in New Lending to Small Businesses, Help Create Jobs

WASHINGTON, D.C. – Today, the U.S. Department of the Treasury announced the approval of applications for State Small Business Credit Initiative (SSBCI) funding from 11 states and Washington, D.C.  This funding will help create new private sector jobs and spur more than $3.6 billion in additional small-business lending. The SSBCI, which supports state-level, small-business lending programs, is an important component of the Small Business Jobs Act that President Obama signed into law last fall.

“These funds will provide critical support to state-level programs that help expand small-business lending and spur private sector job growth,” said Deputy Secretary of the Treasury Neal S. Wolin. “Unlocking credit for small businesses will provide a powerful boost for investment and job creation in local communities across the country.”

Under the Small Business Jobs Act, these 11 states and Washington, D.C. can access a collective total of $360 million in SSBCI funds. These states and Washington, D.C. expect to generate a minimum “bang for the buck” of at least $10 in new private lending for every $1 in federal funding. As such, this $360 million allocation is expected to support more than $3.6 billion in new private lending.

The applications for SSBCI funding that were approved as part of today’s announcement include those submitted by Alabama ($31.3 million), Florida ($97.7 million), Idaho ($13.2 million), Iowa ($13.2 million), Louisiana ($13.2 million), Mississippi ($13.2 million), Ohio ($55.1 million), Oregon ($16.5 million), Tennessee ($29.7 million), Texas ($46.6 million), Virginia ($18.0 million), and Washington, D.C. ($13.2 million).

Under the SSBCI, all states are offered the opportunity to apply for federal funds for state-run programs that partner with private lenders and investors to increase the amount of credit available to small businesses. States must demonstrate a reasonable expectation that every $1 in federal funding will generate a minimum of $10 in new private lending.  Accordingly, the overall $1.5 billion federal funding commitment for this program is expected to result in at least $15 billion in additional private lending nationwide.

For more information about the SSBCI, please visit link. More information on the applications that were approved as part of today’s announcement is included below:

Alabama -- $31.3 million

Treasury will allocate a total of $31,301,498 to Alabama under the SSBCI. The Alabama Department of Economic and Community Affairs will use these funds to launch three new small business lending programs: the Alabama Capital Access Program, the Alabama Loan Guarantee Program, and the Alabama Loan Participation Program. 

Florida -- $97.7 million

Treasury will allocate a total of $97,662,349 to Florida under the SSBCI.  Florida’s Office of Tourism Trade and Economic Development will partner with Enterprise Florida, Inc., a public-private economic development partnership, to launch the Venture Capital Program, which will make equity investments in small businesses, and the Florida Small Business Loan Support Program. Additionally, the Office of Tourism Trade and Economic Development will launch the new Florida Capital Access Program to spur small business lending by private sector lenders.

Idaho -- $13.2 million

Treasury will allocate a total of $13,168,350 to Idaho under the SSBCI.  Idaho’s Department of Commerce will partner with the Idaho Housing and Finance Authority to support the Idaho Collateral Support Program. 

Iowa -- $13.2 million

Treasury will allocate a total of $13,168,350 to Iowa under the SSBCI.  The Iowa Department of Economic Development (IDED) will use these SSBCI funds to support the launch of the Iowa Capital Access Program, and to provide additional funding for two existing programs: the Iowa Demonstration Fund Program, a venture capital program; and the Iowa Small Business Loan Program, a microloan program. The Iowa Business Growth Corporation will administer the Capital Access Program and will target its outreach specifically to rural communities throughout the state. The Iowa Foundation for Microenterprise and Community Vitality (IFMCV) will administer the Iowa Small Business Loan program and will use the funding to provide participation loans in conjunction with private financing to support small businesses.  The Demonstration Fund, managed by IDED, encourages commercialization activities by small and medium-sized Iowa companies in the areas of product refinement, market planning and market entry activities to foster competitive companies that create jobs in Iowa.

Louisiana – $13.2 million

Treasury will allocate a total of $13,168,350 to Louisiana under the SSBCI.  Louisiana’s Department of Economic Development will use these funds to support two existing programs: the Louisiana Small Business Loan Guarantee Program and the Louisiana Seed Capital Program, a venture capital program. 

Mississippi -- $13.2 million

Treasury will allocate a total of $13,168,350 to Mississippi under the SSBCI.  The Mississippi Development Authority will use these SSBCI funds to establish the Mississippi Small Business Loan Guarantee Program, a new loan guarantee program for the state. 

Ohio -- $55.1 million

Treasury will allocate a total of $55,138,373 to Ohio under the SSBCI.  Ohio’s Department of Development will use these funds to support an existing Capital Access Program; to launch the Small Business Collateral Enhancement Program, a new cash collateral program; and to launch the Targeted Investment Program, a new venture capital program.

Oregon -- $16.5 million

Treasury will allocate a total of $16,516,197 to Oregon under the SSBCI program. The Oregon Business Development Department will use these SSBCI funds to support the Oregon Capital Access Program, a Credit Enhancement Fund, a loan guarantee program, and the existing Oregon Business Development Fund, a loan participation program.

Tennessee -- $29.7 million

Treasury will allocate a total of $29,672,070 to Tennessee under the SSBCI.  Tennessee’s Department of Economic and Community Development will use these funds to establish a new venture capital program called the “INCITE Fund.” 

 

Texas -- $46.6 million

Treasury has allocated a total of $46,553,879 to Texas under the SSBCI. The Texas Department of Agriculture will use these funds to launch two new programs: the Texas Small Business Venture Capital program and the Texas Loan Guarantee program.

Virginia -- $18.0 million

Treasury has allocated $17,953,191 to Virginia under the SSBCI.  The Virginia Small Business Financing Authority will use these funds to enhance the existing Virginia Capital Access Program; and the existing Economic Development Loan Fund, a loan participation program that provides subordinated gap financing to qualified small businesses.

Washington, D.C. -- $13.2 million

Treasury will allocate a total of $13,168,350 to Washington, D.C. under the SSBCI.  Washington, D.C. intends to use this allocation to support a new Capital Access Program.​

Treasury Kicks Off Billions Of Dollars In Main Street Lending Through The Small Business Lending Fund

Community Banks Receive Funding to Help Small Businesses Access Capital,

Create New Jobs 

WASHINGTON – Today, the U.S. Department of the Treasury announced that six community banks received a total of $123 million as part of the first wave of capital provided by the Small Business Lending Fund (SBLF). The SBLF, which was established as part of the Small Business Jobs Act that President Obama signed into law, encourages community banks to increase their lending to small businesses, helping those companies expand their operations and create new jobs.          

“Expanding access to credit for small businesses will provide a powerful spark for growth and job creation,” said Treasury Secretary Tim Geithner. “These funds will help ensure that more Main Street entrepreneurs have the opportunity to expand their businesses, invest in their local communities, and create new jobs.” 

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.

The SBLF helps small businesses meet this challenge by providing 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 to small businesses so they can expand and create jobs.

The SBLF is one part of the Obama Administration’s comprehensive agenda to help small businesses access the capital they need to invest and hire. The State Small Business Credit Initiative (SSBCI), which is also a key part of the Small Business Jobs Act, allocates $1.5 billion to new and existing state programs that will leverage private financing to spur $15 billion in new lending to small businesses and small manufacturers.  A total of 54 states and territories applied to take part in the SSBCI and 14 states have already had their applications approved for $488 million in SSBCI funding. 

The Obama Administration has also supported 17 direct tax breaks that provide tax relief of more than $50 billion for small businesses. These tax breaks were designed to support job creation and retention, entrepreneurship, investment, and growth. The Administration has also worked with Congress to extend and expand existing Small Business Administration loan programs that helped put more than $42 billion in the hands of small businesses and deliver other important benefits to help small businesses expand and hire. 

The full list of community banks that received funding through the first wave of SBLF capital includes the following:

•Community Trust Financial Corporation (Ruston, Louisiana) – $48.3 million

•Level One Bancorp, Inc (Farmington Hills, Michigan) – $11.3 million

•Pioneer Bank, SSB (Drippings Springs, Texas) – $3.0 million

•ServisFirst Bancshares Inc. (Birmingham, Alabama) – $40.0 million

•U&I Financial Corp (Lynnwood, Washington) – $5.5 million

•Virginia Heritage Bank (Fairfax, Virginia) – $15.3 million

Tom Broughton, President and CEO of ServisFirst Bancshares, Inc. said: "This lending fund program will enable us to continue to grow our small business loan portfolio and assist in the economic recovery in our markets.”  

Additional SBLF funding announcements will be made on a rolling basis in the weeks ahead. For more details on the SBLF program, please visit, link and http://www.treasury.gov/resource-center/sb-programs/DocumentsSBLFTransactions/SBLF%20Transactions%20Report%20-%20THRU%2007062011.pdf