Two Orange County community banks will receive small-business loan funds from the U.S. Treasury Dept. under the 2010 Small Business Jobs Act.
Capital Bank will receive $3.1 million and Partners Bank of California will receive $2.5 million through the Small Business Lending Fund. The program allows small banks to make larger business loans with 90% guarantees if the borrowers default. The goal was to encourage community banks to increase their lending to small businesses so that they would create new jobs.
Community banks were targeted because many of the nation’s biggest banks had reduced their small-business lending, according to a study by MultiFunding LLC.
Congress allocated $30 billion for the program. The Treasury Dept. says it has disbursed $4 billion to 332 financial institutions nationwide. More than 600 banks applied and were rejected.
In the final round of funding, 16 California banks received $103.1 million. The recipients are:
- Capital Bank, San Juan Capistrano, $3.1 million
- Partners Bank of California, Mission Viejo, $2.5 million
- First Northern Community Bancorp, Dixon, $22.8 million
- Bank of Commerce Holdings, Redding, $20.0 million
- California Bank of Commerce, Lafayette, $11.0 million
- FNB Bancorp, South San, $12.6 million
- Security California Bancorp, Riverside, $7.2 million
- Low Income Investment Fund, San Francisco, $7.5 million
- Community Valley Bank, El Centro, $2.4 million
- Opportunity Fund Northern California, $2.2 million
- Rural Community Assistance Corp., West Sacramento, $4.3 million
- The Bank of Santa Barbara, Santa Barbara, $1.9 million
- California Coastal Rural Development Corp., Salinas, $870,000
- Valley Economic Development Center, Inc., Van Nuys, $661,000
- Promerica Bank, Los Angeles, $3.8 million
- OBDC Small Business Finance, Oakland, $219,000
“Billions of dollars in SBLF funds are now being put to use in communities all across the nation, spurring small business growth and job creation,” said Deputy Secretary of the Treasury Neal S. Wolin.
However, Paul Merski, chief economist at the Independent Community Bankers of America, said, “The program is a mixed bag. There’s also been quite a bit of frustration with the execution and implementation of the program.”
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