Pathway Lending Awarded $30,000 Grant From Bank Of America

Grant Will Be Used To Tap New Low Cost Funds For Small Business Lending

  • Monday, May 7, 2012

In an effort to find new ways to help small and start-up businesses in the region, Pathway Lending is working with Bank of America to unlock new loan capital for small business expansion and job creation. Pathway Lending on Monday announced it has received a $30,000 grant from Bank of America for use as loan loss reserves required by federal programs to access $200,000 in loan capital that is then used to make small-sized loans to local businesses. 

As many as 20 businesses are expected to receive much needed loans from this new effort.  Pathway Lending also estimates the new capital will help retain or create 60 jobs, by supporting local business in Tennessee.

According to Clint Gwin, President at Pathway Lending, “Having access to private capital that is leveraged with public funds is critical to our ability to provide affordable financing products to businesses in Tennessee.  This award from Bank of America will allow us to access funding from the US Small Business Administration’s Microloan Program that will create a low-cost pool of funds for businesses with capital needs of $50,000 or less.”

Federal programs to support small business lending often require CDFIs to fund a loan loss reserve. As a result, CDFIs that lack these reserves are unable to tap this source of flexible capital for small businesses. As the nation’s largest CDFI lender with more than $1 billion invested with 120 CDFIs in 37 states, Bank of America recognized the critical role CDFIs play in revitalizing local economies and created this grant program to quickly provide CDFIs with access to this capital to spur local economic growth.

“Helping strengthen small businesses and new start-up companies stimulates job creation and is critical to our nation’s economic recovery. Bank of America is empowering these entrepreneurs by directing private sector capital to unlock exponentially greater amounts of federal dollars for their businesses. These loan loss reserve grants may unlock as much as $120 million in low-cost, long-term capital for small business and microloans nationwide by mid-2012, so even the smallest grant enables a nonprofit lender to leverage approximately ten times that amount to lend to small businesses. This creates a ripple effect impacting job growth, spending and overall economic expansion,” said John Stein, Tennessee president, Bank of America.

Since the grant program was created in the fall of 2010, Bank of America has provided nearly $10.25 million to CDFIs across the country, enabling them to access more than $102 million in federal micro-capital serving more than 9,000 local businesses and helping create and retain more than 14,000 jobs.

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