SBLF not lending at sufficient pace

9/27/2011

President Barack Obama's Small Business Lending Fund was initiated last year to create jobs and provide companies with loans.

However, the program will conclude with just over 10 percent of the $30 billion allocated for the fund dispersed to small businesses, Bloomberg reports.

Tight loan restrictions and a questionable economic landscape were seen as the primary barriers to increase loan distribution. Furthermore, consumer confidence has dropped to its weakest point since June 2009, and the Bloomberg Consumer Comfort Index fell from 52.1 percent to 49.3 percent during that time period.

Despite the relatively poor display, John Dalby, chief executive officer of Eureka, California-based Redwood Capital Bancorp, remains positive.

"We met our 10 percent target and expect to do more, but, frankly, a lot of the customers we get we steal from the others," said Dalby, whose bank received a $7.3 million investment.

Other banks haven't been so fortunate. According to the Phoenix Business Journal, not a single community bank in Arizona qualified for the funds. Nationally, only 382 of the 932 institutional applications were approved by SBLF regulators.