Small-Biz Loan Money Finally Trickles to Community Banks The Treasury Department recently opened the spigot on the $30 billion Small Business Loan Fund. But is it too little, too late?

By Carol Tice Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

Small-Biz Loan Money Finally Trickles to Community Banks

Talk about trickle-down economics.

With little fanfare, the U.S. Treasury Department finally began releasing funds from the $30 billion Small Business Lending Fund. That fund, which was authorized by the Small Business Jobs Act of 2010, was signed into law last September.

But only $123 million has been disbursed -- and only just half-dozen community banks around the country have received funds last week.

The Small Business Lending Fund was created to help small businesses overcome lending challenges by providing capital to community banks with less than $10 billion in assets. Community banks are said to be better-equipped to make small business loans because they tend to rely on relationships and may have a better idea about whether a business owner is a credible risk. Plus, these banks weren't as exposed to home mortgages, which entangled so many of their larger counterparts.

Admittedly, this is the "first wave" of capital provided by the Small Business Lending Fund. As of the end of June, the Treasury Dept. had received 869 applications amounting to an $11.6 billion drawdown from the program. But seeing the trickle of funds coming through, one has to wonder: Is it too little -- and too late?

No one quite seems to know. One thing's for sure, it could have happened more quickly. Senators who pushed for the fund have been hopping mad over the foot-dragging for months. Back in May, Sens. Jeff Merkley (D.,Ore.) and Barbara Boxer (D.,Calif.) were writing Treasury Secretary Timothy Geithner basically pleading for the loan fund to be implemented pronto.

About two months later, the tap finally has started to turn, a move applauded by community bankers.

There was no announced schedule of when the rest of the money will be in bankers' hands -- only a vague statement from Treasury that additional announcements about the Small Business Loan Fund will be "made on a rolling basis in the weeks ahead."

Would your business benefit if community banks were better funded? Leave a comment and let us know.

Carol Tice

Owner of Make a Living Writing

Longtime Seattle business writer Carol Tice has written for Entrepreneur, Forbes, Delta Sky and many more. She writes the award-winning Make a Living Writing blog. Her new ebook for Oberlo is Crowdfunding for Entrepreneurs.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

She Quit Her Job at Trader Joe's After Starting a Side Hustle With $800 — Then She and Her Brother Grew the Business to $20 Million

Jaime Holm and Matt Hannula teamed up to build a business in an industry that "didn't exist" yet.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Growing a Business

This Local Bakery Has Lines Out the Door. Here Are the Secrets to Its Success.

Known for its viral flat croissants and innovative desserts, Alexander's Patisserie also excels in hands-on leadership and team culture.

Business News

Nissan Is Doubling Its Initial Layoff Announcement, Cutting 20,000 Jobs: 'A Wake-Up Call'

The automaker is dealing with slowing sales and a recent failed merger with Honda.

Buying / Investing in Business

Former Zillow Execs Target $1.3T Market

Co-ownership is creating big opportunities for entrepreneurs.

Business News

Microsoft Is Laying Off Over 6,000 Employees, About 3% of Its Workforce. Here's Why.

The company said the cuts will affect all divisions and locations, with a focus on managers.