The U.S. Treasury recently announced the results of a federal program developed to stimulate small business loans. Salisbury Bank, one of only three Connecticut Banks chosen to participate in the U.S. Treasury Department’s Small Business Lending Fund, saw its small business lending increase 35 percent, or $27.5 million, to $105.2 million since the program began in 2011.
Salisbury Bancorp, the parent company of Salisbury Bank, received $16 million in SBLF funds in 2011. The Small Business Lending Fund (SBLF) was created to spur small business lending by providing capital to qualified community banks with assets under $10 billion. It was enacted as part of the Obama Administration's Small Business Jobs Act of 2010, with the hope that the added capital would help create jobs and promote economic growth.
Hundreds of banks applied to the program, but only three financial institutions in Connecticut actually received funds, Salisbury Bank being one of them.
“The program was a key for Salisbury Bank to boost our lending and also access inexpensive capital,” says Rick Cantele, President and CEO. "It provided us with a level of confidence in challenging economic times to go ahead and make loans to small businesses."
Nationally, the 281 banks participating in the SBLF program have increased their small business lending by $7.4 billion, with 89 percent of those banks having increased their lending.
The Treasury invested $4 billion in 332 institutions. Small business lending, under the program, is defined as loans under $10 million to companies with $50 million or less in revenue.
The benefit to banks participating in the program is that it also allowed community lenders to trade in Troubled Asset Relief Program (TARP) funds for lower cost capital with fewer government restrictions.
Mr. Cantele said, “The SBLF provided Salisbury Bank significant savings. The $9 million in TARP funds the Bank received had an annual 5 percent interest rate, but the SBLF capital that replaced those funds has an interest rate just over 1 percent. It's almost impossible to find capital at that cost in this environment.”
Salisbury Bancorp, Inc. is the parent company of Salisbury Bank and Trust Company, a full-service community bank headquartered in Lakeville, Connecticut which presently operates full service branches in Canaan, Lakeville, Salisbury and Sharon, Connecticut, Sheffield and South Egremont, Massachusetts as well as Dover Plains and Millerton, New York. The Bank has been serving families and businesses for 160 years and offers a full range of consumer and business banking products and services as well as trust and wealth advisory services.
Photo Caption: Richard J. Cantele Jr., President and CEO of Salisbury Bank.