Small Business Lending Fund

Mission Statement

Public Law 111-240, also known as the Small Business Jobs Act (hereafter “the Act”),

established the Small Business Lending Fund (SBLF). The SBLF is a program designed to 

increase the availability of credit to small businesses by providing capital to eligible institutions 

with assets of less than $10 billion.

Program Summary 

Section 4108 of the Act provides that the cost of purchases of preferred stock and other financial 

instruments made as capital investments shall be determined as provided under the Federal 

Credit Reform Act (FCRA) of 1990 (2 U.S.C. 661 et seq.). Per the terms of the Act, all 

investment activity will occur in FY 2011. After analysis of demand for the program and 

anticipated uptake by eligible institutions, the program is expected to provide $17.4 billion in 

investments designed to increase the availability of credit to small business. Treasury has 

calculated that, using FCRA methodology, the program’s subsidy cost will be $1.26 billion.

FY 2011 Estimates

(in millions)

Program Level Subsidy Amount Subsidy Rate

$17,399 $1,260 7.24%

The Act also provides for the reasonable costs of administering the program, including making, 

holding, managing, and selling the capital investments. These activities will occur in FY 2011 

and beyond.

FY 2011 and 2012 Priorities

 Process all received applications by September 27, 2011 in strict adherence to the 

eligibility requirements of the legislation

 Execute a compliance regimen to ensure that all Fund participants abide with the terms of 

the program

 Install an asset management capability to effectively monitor the Fund and minimize risk 

to Treasury.

FY 2010 FY 2011 

SBLF Estimated Estimated Estimated $ Change % Change

Program* 0 1,260,000 0 (1,260,000) -100.00%

Administration 0 54,649 72,603 17,954 32.85%

Total Outlays $0 $1,314,649 $72,603 ($1,242,046) -94.48%

Total FTE 0 41 55 14 34.15%

* Reflects only on-budget amounts.

FY 2012
SBLF - 2

Table of Contents

Section 1 – Purpose ..................................................................................................................3

1A – Description of Vision and Priorities ...................................................................... 3

Section 2 – Budget Adjustments and Appropriation Language..........................................5

2.3 – SBLF Financing Account Summary...................................................................... 5

2.4 – SBLF Investment Level Summary ........................................................................ 5

Section 3 – Budget and Performance Plan ............................................................................7

3.1 – Budget by Strategic Outcome ................................................................................ 7

3.2.1 – SBLF Program Budget and Performance Plan ................................................... 7

3.2.2 – SBLF Administration Budget and Performance Plan......................................... 8
SBLF - 3

Section 1 – Purpose 

1A – Description of Vision and Priorities 

Enacted into law as part of the Small Business Jobs Act (P.L. 111-240), the Small Business 

Lending Fund (SBLF) encourages lending to small businesses by providing Tier 1 capital to 

qualified community banks with assets of less than $10 billion. Through the SBLF, Main Street 

banks and small businesses can work together to help create jobs and promote economic growth 

in local communities across the nation.

1B – Program Description and Future Outlook 

The SBLF is intended to increase the availability of credit to small businesses by providing 

capital to eligible institutions with assets of less than $10 billion. The dividend or interest rate a 

bank pays for SBLF funding will be reduced as the institution’s qualified small business lending 

increases, relative to the bank’s baseline small business lending established at the time the 

applicant is awarded SBLF funding by the Treasury. Because banks leverage their capital, the 

SBLF could help increase lending to small businesses in an amount that is multiples of the total 

capital provided to participating institutions. These new loans will help small businesses grow 

and create new jobs.

An insured depository institution is eligible if it has assets of less than $10 billion and it meets 

the other requirements for participation. If the institution is controlled by a holding company, the 

combined assets of the holding company determine eligibility. Community development loan 

funds are also eligible. 

Banks that have total assets of $1 billion or less may apply for SBLF funding that equals up to 

5% of risk-weighted assets. Banks that have assets of more than $1 billion, but less than $10 

billion, may apply for SBLF funding that equals up to 3% of risk-weighted assets. 

The Small Business Lending Fund also provides an option for eligible community banks to 

refinance preferred stock issued to the Treasury through the Capital Purchase Program (CPP) or 

the Community Development Capital Initiative (CDCI) under certain conditions. 

An institution is not eligible if it is on the Federal Deposit Insurance Corporation’s problem bank 

list (or similar list) or has been removed from that list in the previous 90 days. 

With the approval of its regulator, an institution may exit the Small Business Lending Fund at 

any time simply by repaying the funding provided along with any accrued dividends.

Pursuant to the Act, all funds received by the Treasury in connection with purchases made, 

including interest payments, dividend payments, and proceeds from the sale of any financial 

instrument, will be used to pay down the public debt. 

Though all investments will be occurring in FY 2011, the holding, managing, and selling the 

capital investments will require a staff presence in future years. The SBLF program office has 
SBLF - 4

been designed to ensure that strong internal controls are in place and that costs are minimized by 

leveraging existing Treasury infrastructure whenever possible.
SBLF - 5

Section 2 – Budget Adjustments and Appropriation Language

2.2 – Operating Levels Table – Administration Costs

Dollars in Thousands

2.3 – SBLF Financing Account Summary

2.4 – SBLF Investment Level Summary

FY 2011 Estimates

(in millions)

Program Level Subsidy Amount Subsidy Rate

$17,399 $1,260 7.24%

2A – Enacting Legislation

Small Business Jobs Act of 2010 (P.L. 111-240).

Small Business Lending Fund FY 2010 

Obligated

FY 2011 

Estimated

F

Y 

2

FY 2012 

Estimated

FTE - 41 55

Object Classification:

11.1 Full-Time Permanent Positions..................................... $0 $5,488 $7,435

12.0 Personnel Benefits...................................................................... 0 1,537 2,509

21.0 Travel.................................................................................. 0 187 187

25.1 Advisory & Assistance Services.................................................... 0 38,812 51,645

25.3 Purchase of Goods/Serv. from Govt. Accts...... 0 8,625 10,827

Total................................................ $0 $54,649 $72,603

Activities:

Administration 0 54,649 72,603

Total................................................ $0 $54,649 $72,603

2010 2011 2012

Obligations $0 $17,724 $628

Collections $0 $2,162 $1,979

Financing Authority (net) $0 $15,562 -$1,351

Financing Disbursements (net) $0 $15,562 -$1,351

Financing Accounts – Non-Budgetary Financial Summary 

(dollars in millions)
SBLF - 6

2B – Legislative Proposals

There are no current proposals for amending the enacting legislation.
SBLF - 7

Section 3 – Budget and Performance Plan

This table lists FYs 2011-2012 resources by strategic goal, objective and outcome outlined in the 

FY 2007-2012 Treasury Department Strategic Plan. For detailed information about the FY 

2007-2012 Treasury Strategic Plan, please go to: http://www.treasury.gov/about/budgetperformance/strategic-plan/Documents/strategic-plan2007-2012.pdf

3.1 – Budget by Strategic Outcome

Dollars in Thousands

3A – SBLF Program ($1,260,000,000 on-budget in FY 2011; $0 in FY 2012): Pursuant to the 

Act, all investment activity will occur in FY 2011. The Act also requires that the cost of 

purchases of preferred stock and other financial instruments made as capital investments shall be 

determined as provided under the Federal Credit Reform Act of 1990. 

After careful analysis and credit modeling, Treasury estimates a total program volume of $17.4 

billion. Treasury credit modeling also indicates a projected subsidy rate of 7.24% and a budget 

cost of $1.26 billion for SBLF. 

The total program volume and anticipated repayments are reflected in the SBLF financing 

account. This non-budgetary account records all cash flows to and from the Government 

resulting from direct capital obligated in 2011 and beyond. The amounts in this account are a 

means of financing and are not included in the budget totals.

3.2.1 – SBLF Program Budget and Performance Plan

Performance metrics are currently in development for the SBLF program and will be finalized in 

2011. 

3B – SBLF Administration ($54,649,000 in FY 2011; $72,603,000 in FY 2012): The authority 

to pay administrative expenses is provided by Section 4108(b) of the Act. Administrative 

expenses will include the costs of government employee salaries, contract support, and

reimbursement to the Treasury Office of Inspector General for program audits. Pursuant to the 

Act, Treasury will be submitting semi-annual reports to the appropriate committees of Congress 

detailing administrative expenses.

Treasury Strategic Outcome* FY 2011 

Estimated

FY 2012 

Estimated

Prevented or mitigated financial and economic crises $1,314,649 $72,603 -94.5%

Total $1,314,649 $72,603 -94.5%

* Reflects only on-budget amounts.

Percent 

Change SBLF Program

FY 2008 

Actual

FY 2009 

Actual

FY 2010 

Estimated

FY 2011 

Estimated

FY 2012 

Estimated

SBLF Program Outlay Levels* $0 $0 $0 $1,260,000 $0

Total Program Outlay Levels $0 $0 $0 $1,260,000 $0 

* Reflects only on-budget amounts.
SBLF - 8

3.2.2 – SBLF Administration Budget and Performance Plan

Performance metrics are currently in development for the SBLF program and will be finalized in 

2011. 

Administration

FY 2008 

Actual

FY 2009 

Actual

FY 2010 

Estimated

FY 2011 

Estimated

FY 2012 

Estimated

Administration Outlay Levels $0 $0 $0 $54,649 $72,603

Total Administration Outlay Levels $0 $0 $0 $54,649 $72,603