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Benefits to the Nation’s Economy

Small businesses play a critical role in the U.S. economy. 

They are central to creating jobs and restoring our 

economic prosperity. According to Federal Reserve Board 

data, small businesses employ roughly one-half of all 

Americans and account for about 60 percent of gross job 

creation. And newer small businesses, those less than two 

years old, are especially important: over the past 20 years, 

these start-up enterprises accounted for roughly onequarter of gross job creation.1

The Small Business Lending Fund enables community 

development loan funds across the nation to help small 

businesses put Americans back to work. 

How the Small Business Lending Fund Works for CDLFs

The Small Business Lending Fund aims to stimulate small 

business lending by providing capital to participating CDLFs. 

The initial dividend rate will be 2% for the first 8 years. After 

the eighth year, the rate will increase to 9% if the CDLF has not 

already repaid the SBLF funding.

Because CDLFs leverage their capital, the Small Business 

Lending Fund could help increase lending to small 

businesses in an amount that is multiples of the total capital 

provided to participating CDLFs. These new loans will 

enable small businesses to grow and create new jobs.

The U.S. Department of the Treasury will provide CDLFs

with funding by purchasing equity equivalent (EQ2) 

securities from each participating CDLF. 

Amount of Funding Available

A CDLF may apply for SBLF funding in an amount not less

than 1% and not more than 5% of its total assets as

reported in its audited financial statements for the fiscal

year ended in calendar year 2009.

Application Process for CDLFs

If your CDLF would like to apply to participate in the Small 

Business Lending Fund, it must submit the required 

application materials and a small business lending plan to 

Treasury at CDLFApps@treasury.gov.

The application deadline for CDLFs is June 22, 2011.

Treasury encourages eligible CDLFs to submit their 

application as soon as possible to allow sufficient time for 

processing.

Overview of the Small Business Lending Fund

For Community Development Loan Funds

Enacted into law as part of the Small Business Jobs Act, the Small Business Lending Fund (SBLF) is a 

$30 billion fund that encourages lending to small businesses by providing capital to qualified community 

banks and community development loan funds (CDLFs) with assets of less than $10 billion. Through 

the Small Business Lending Fund, CDLFs and small businesses can work together to help create jobs 

and promote economic growth in local communities across the nation.

The Small Business Lending Fund

• Supports Main Street banks, community development 

loan funds, and small businesses

• Enables community development loan funds to 

access capital at 2% as an incentive to increase their 

lending to small businesses

[1] Ben Bernanke, Federal Reserve Board Chairman, “Addressing the Financing Needs of Small Businesses,” Federal Reserve Meeting Series, 

July 12, 2010.
 

 

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Eligibility Requirements

To be eligible for participation in the Small Business Lending 

Fund, a CDLF must:

• be certified by the Community Development Financial 

Institutions Fund (CDFI Fund) as a CDFI;

• be exempt from taxation under the Internal Revenue 

Code of 1986;

• have at least three years of operating experience;

• have audited financial statements for the three most 

recent fiscal years ended and a clean audit opinion 

with respect to its audited financial statements for the 

most recent fiscal year-end; 

• have total assets not more than $10 billion; and,

• satisfy the financial eligibility criteria.

Financial Eligiblity Criteria

Participating CDLFs must meet the following financial 

eligibility criteria:

• average net income for the past three years must be 

positive;

• cash and cash equivalents are equal to or greater than 

operating expenses for each of the four most recent 

quarters ended;

• year-end cash and cash equivalents are equal to or 

greater than 25% of annual operating expenses for 

one or both of the two most recent fiscal years ended;

• net assets plus EQ2 as a percentage of total assets 

must be at least 20%;

• loan loss reserves as a percentage of loans that are 90 

days or more delinquent must be at least 30%;

• loans 90 days or more delinquent as a percentage of 

unrestricted net assets plus loan loss reserves must be 

less than 40%; and,

• at least 10% of total loans must be Qualified CDLF 

Small Business Lending (as defined in the SBLF Initial 

Call Report for Community Development Loan Funds).

Repayments

A CDLF will be responsible for making quarterly interest 

payments to Treasury. A CDLF may exit the Small Business 

Lending Fund at any time simply by repaying the funding 

provided along with any accrued dividends.

Application Materials

The following checklist, which is also included in the 

Application Instructions for Community Development Loan 

Funds, should be used to ensure that your application 

includes all of the required application documents:

 A completed, signed, and dated application 

package, which includes the Application, SBLF 

Initial Call Report for Community Development 

Loan Funds, Eligibility Worksheet, and Loan 

Portfolio Quality Worksheet.

 Audited annual financial statements for each of the 

three most recent fiscal years, prepared in 

accordance with GAAP.

 An audit opinion letter for the annual financial 

statements of the most recent fiscal year-end.

 Quarterly financial statements for each of the four 

most recent quarters ended, prepared in 

accordance with GAAP.

 An IRS determination letter wtih respect to your 

CDLF’s tax-exempt status.

 A completed, signed, and dated Certification of 

Material Events Form.

 A small business lending plan (guidance and a 

template for your CDLF’s small business lending 

plan can be found at www.treasury.gov/SBLF).

Additional Information

To learn more, visit the Small Business Lending Fund 

website at www.treasury.gov/SBLF or make contact in one 

of the three ways shown below. 

For general inquiries and questions, please call the Small 

Business Lending Fund information line at 888-832-1147.

For communications pertaining to a specific institution, 

please email CDLFInstitutions@treasury.gov, a Treasury

email address.

For media inquiries, please call the U.S. Department of the 

Treasury Press Office at 202-622-2960.