Feds Give $19.3M in Small-Business Funding to 2 CA Banks (Update)

UPDATE: Michael Nogueira, president of the Eagle Rock Chamber of Commerce, said he would call the Department of the Treasury to find out if small businesses in Eagle Rock might benefit from the federal funds received by the two northern California banks.

“It’s too bad we don’t have one of these banks here in L.A.,” he said, adding: “I guess a small business  owner could apply for a loan to the banks but how are we going to get the outreach?”

Eagle Rock Patch is awaiting a response from the Department of the Treasury about whether Southern California small businesses can benefit from the federal funds—and if any banks in the region are likely to receive similar funds.

The federal Department of the Treasury announced Wednesday that two community banks in California have received a combined $19.3 million through the Small Business Lending Fund (SBLF), established as part of the Small Business Jobs Act, which President Obama signed into law in September 2010 to foster increased community bank lending to small businesses to help them expand and create new jobs.    

The two state banks chosen for the federal funds are the San Francisco-based Pacific Coast Bankers’ Bancshares, which received $12.0 million, and the Eureka-based Redwood Capital Bancorp, which got $7.3 million, the Department of the Treasury said in a news release.

Further SBLF funding announcements are expected in coming weeks, the statement said, adding that the funds will be provided to community banks that hold less than $10 billion in assets.

“Access to capital is critical to ensuring small businesses can invest, expand, and hire in their local communities,” the statement quoted Treasury Deputy Secretary Neal S. Wolin as saying. “These funds will help unlock credit for Main Street entrepreneurs to support private sector growth and job creation.”  

Considered critical to the national economy, small businesses employ about 50 percent of all Americans and account for about 60 percent of gross job creation, according to the Department of the Treasury. Yet small business owners face what the department's news statement deemed “disproportionate challenges in the aftermath of the recession and credit crisis, including difficulty accessing capital.”

More information on the SBLF program can be viewed by clicking here.

Yet more information is available here.

The SBLF provides $1.5 billion to new and existing state programs aimed at generating as much as $15 billion in new lending to small businesses and small manufacturers, according to the treasury department.