An Astoria-based bank is getting $19 million from the federal government to provide loans to small businesses in the city and New Jersey.
The grant is being given to Alma Bank, whose corporate office is at 28-31 31st St. in Astoria, through the U.S. Treasurys Small Business Lending Fund.
The fund was created through the Small Business Jobs Act, which President Barack Obama signed into law in September 2010 and is aimed at helping small businesses to expand their operations through loans and create new jobs.
This really is, we believe, an opportunity for community lenders to both build their local community and strengthen their institution at the same time, said Jason Tepperman, director of the fund.
Alma Bank, which opened in September 2007, has 10 branches in the city and New Jersey, including branches in the Queens neighborhoods of Astoria and Bayside. It said since it has begun it has been active in lending to small businesses.
We are very excited about this, about the program, Tepperman said. Our hope is that it will be a win for everyone.
He said the fund provides capital to banks with less than $10 billion in assets. It purchases preferred stock in the bank, and the bank pays a dividend based on that stock. Alma will pay lower dividends if it increases their small business lending.
We want to be careful to confirm that the banks that receive this funding are well-positioned to increase their small business funding as well as protect the taxpayers investment, Tepperman said.
While Tepperman could not speak to Almas qualifications, he said the advantage of the federal government giving this money to local banks to loan in small businesses is that they may know which businesses are the best investment in the area.
By partnering with community banks, we are able to leverage their knowledge of local communities, Tepperman said.
He said the fund still stays involved in the process after the money is given. Each quarter the U.S. Treasury checks how much the bank has increased its small-business lending.
Tepperman said so far the U.S. Treasury has given $1.8 billion to 130 community banks and will be giving out more grants in the weeks to come.
Alma had assets of $662 million as of June 30, the bank said.
Deputy Secretary of the Treasury Neal Wolin said in a statement that the fund is a powerful incentive for banks to increase lending to small businesses.
Breaking down barriers to credit will provide critical support to Main Street entrepreneurs looking to invest in their local communities, grow their businesses and put more Americans back to work, Wolin said.
Reach reporter Rebecca Henely by e-mail at rhenely@cn
©2011 Community News Group
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