United Bank has announced the creation of a $12 million loan pool designed to encourage economic development across Alabama and the Florida Panhandle. The pool is designed to assist companies with growth and expansion with loans that range from $250,000 to more than $3 million. Using capital created from New Market Tax Credits, borrowers receive up to 25 percent of their funds at zero interest as an economic development incentive. Transactions involving New Market Tax Credits often are not practical for projects less than $5 million, but the loan pool allows United Bank to make smaller loans without the additional cost. The initiative has already assisted at least five local companies with new equipment financing and debt restructuring totaling more than $9 million.
CapNexus, an online community development finance matching system, is helping CDFI banks make their Bank Enterprise Awards (BEA) applications more competitive. The BEA Program rewards banks that support community development -- in part by giving the highest funding priority for banks' CDFI support activities, including placing deposits in CDFI-certified credit unions. The new service, created in partnership with CDBA and the National Federation of Community Development Credit Unions, automatically matches banks seeking to place deposits with CDFI credit unions looking for deposits. Sign up to place or receive a BEA eligible deposit here.
The Small Business Administration's flagship 7(a) lending program is likely to resume operating this week after briefly putting new guarantees on hold. Record demand had pushed the program to its $18.75 billion funding limit before both chambers of Congress voted to add nearly $5 billion in additional funding authority. The weeklong shutdown could underscore the program's bipartisan support — or give its critics more ammunition to argue that it is too vulnerable to politics. Under 7(a), the SBA provides guarantees of up to 85% on small-business commercial loans. This year is looking to be the most successful in the history of the program, with gross loan guarantees poised to break the $20 billion threshold in fiscal 2015.