Heritage receives millions in federal funding aimed at increasing jobs with small business loans.
Heritage Bancshares Group Inc., the parent company of Heritage Bank NA, received $11 million on Thursday, Sept. 22, through the Small Business Lending Fund (SBLF) of the U.S. Department of the Treasury. This will provide up to $110 million additional loans to local businesses and farmers and raise the legal lending limit at Heritage to more than $6 million.
“This program means lower interest rates to qualifying borrowers over the next 4 1/2 years. That will help give small businesses and farmers the opportunity to expand their business, hire additional workers, and spur growth in the communities we serve,” says Tom Geiger of Heritage Bancshares Group. “The doors at Heritage Bank are always open to small businesses in our region.”
Heritage has 13 locations in Minnesota and Iowa. “We are honored to be one of the healthy financial institutions that the Department of the Treasury selected to participate in this program,” Geiger said. “Heritage has always maintained the goal of helping customers achieve financial success. The SBLF is one more great tool to help us serve that mission.”
“These funds will provide a powerful incentive for community banks to expand their lending to small businesses, spurring new investment and job creation,” said Neal S. Wolin, the deputy secretary of the Treasury. The SBLF, which was established as part of the Small Business Jobs Act of 2010, encourages community banks to increase their lending to small businesses, helping those companies expand their operations and create new jobs.
The SBLF helps small businesses meet this challenge by providing capital to community banks that hold under $10 billion in assets, according to officials. The dividend rate a community bank pays on SBLF funding is reduced as that bank increases its lending to small businesses – providing a strong incentive for new lending to small businesses so they can expand and create jobs.
According to officials at the Treasury, small businesses play a critical role in the U.S. economy and are central to growth and job creation. Small businesses employ roughly half of all Americans and account for about 60 percent of gross job creation. But small businesses faced disproportionate challenges in the aftermath of the recession and credit crisis, including difficulty accessing capital, according to a federal statement.