Geithner calls lending fund very successful

10/18/2011

The U.S. Treasury Department has taken some flack lately for its Small Business Lending Fund, which the majority of government officials have deemed a failure after dispersing a mere $4 million of its allocated $30 million authorized budget, Politico reports.

Treasury Secretary Timothy Geithner defended the fund's results this week, stating that despite the relatively small output, it would still generate $9 billion in small business loans by 2014 and was a "very effective (and) very successful" use of federal dollars.

"You can't force banks to lend," said Geithner, as quoted by the news source. "But for every bank that got capital in this program, they have more capacity to lend than they otherwise would have had. And I am not aware of a more effective way than this."

Maine Senator Olympia Snowe rained on Geithner's parade, noting that around $2.2 billion of the funds were used to pay back debt owed from President George W. Bush's Troubled Asset Relief Program.

Slate points out that many small banks blame the Treasury for its strict lending requirements and its inability to get the program off the ground with enough time to make an impact. The Treasury only began approving loan applications in July - three months before the SBLF's expiration date.