State Department of Banking and Insurance Commissioner Tom Considine said 16 small banks in New Jersey already have applied for federal Small Business Lending Fund money, but cautioned an extended deadline is approaching.
“For banks that either missed the original deadline (March 31) or were undecided as to whether they wanted to participate, this is another opportunity to apply,” Considine said.
The new deadline to apply for funds is May 16. The banks that already applied have asked for a total of $165 million from the $30 billion made available by the federal Treasury.
The program’s goal is to grow the economy “by providing capital to community banks and encouraging them to lend to small businesses. Those loans enable small businesses to create jobs,” Considine said.
Treasury purchases preferred stock in the banks that are approved, providing capital to the banks, and is repaid in dividends. Dividend rates can decrease to as little as 1 percent as a bank’s small-business lending increases.
Banks that are qualified for the program must have less than $10 billion in assets, devote most of their lending to small businesses in their community and submit a small-business lending plan to DOBI before the application is sent to the federal Treasury.
A recent survey of the New Jersey Bankers Association said it’s the number of qualified candidates to make loans to, not the amount of capital, that is holding back lending in the state.
E-mail Melinda Caliendo at firstname.lastname@example.org