WASHINGTON, D.C. – U.S. Sen. Sherrod Brown (D-OH) announced today that a central Ohio bank will receive funding to increase their lending to small businesses, helping Ohio companies expand their operations and create new jobs. Economic and Community Development Institute, Inc. in Columbus will receive $203,000 through the Small Business Lending Fund (SBLF).
"Too many small businesses around Ohio want to hire new workers and expand operations, but can’t access the credit they need. Small businesses are engines of job creation and will lead our state’s economic recovery,” Brown said. “This latest round of SBLF funding will help Ohio’s vital community banks partner with our small businesses to unlock critical capital to create jobs and drive our economy forward.”
Sixty-five percent of new jobs originate in small businesses, making small business lending critical to our economic recovery. But small business owners faced disproportionate challenges in the aftermath of the recession and credit crisis, including difficulty accessing capital.
To address this challenge, Brown was instrumental in passing the Small Business Jobs and Credit Act, which created the SBLF. The SBLF enables community banks to make loans to small businesses seeking to expand operations or hire new workers.
The SBLF helps small businesses gain access to capital by providing capital to community banks that hold under $10 billion in assets. 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 small business lending so they can expand and create jobs.
Brown fought for a provision in the Small Business Jobs Act that raises SBA loan limits and eliminates certain fees, which is based in part on his Small Business Emergency Loan Relief Act. Because many Ohio small businesses are in the manufacturing industry, they require higher loan limits due to higher capital costs in the industry.
Brown's provision would have increased the caps on some of the most popular SBA loan programs - increasing 7(a) loan limits from $2 million to $5 million, 504 loans from $1.5 million to $5.5 million, and microloans from $35,000 to $50,000. It would also increase the government guarantee on 7(a) loan limits, while eliminating borrower fees on 7(a) and 504 loans.