NEW YORK ( TheStreet) -- What's happening in small business today? 1. Small Business Lending Fund boosts loans by $1.5 billion. Banks receiving capital through the Small Business Lending Fund boosted lending by $1.5 billion in the first quarter vs. the prior three months, the seventh straight quarter of increases and the second highest since the start of the program in 2010, the Treasury said. In total, SBLF participants have increased small-business lending by about $8.9 billion since the depths of the recession in 2009. This increased lending represents an estimated 38,000 additional small business loans over baseline levels, according to Treasury. "In every region of the country, the Obama Administration's Small Business Lending Fund is supporting small and family-owned businesses with the funds they need to create jobs and grow," Deputy Secretary of the Treasury Neal Wolin said in a release. "This quarter's report shows that SBLF participants are continuing to help thousands of small businesses invest, hire and expand in their local communities." The SBLF was established as part of the Small Business Jobs Act that President Obama signed into law in 2010. The fund encourages community banks to lend to small businesses by providing capital to the banks at reduced terms. The dividend or interest rate a community bank pays on SBLF funding is reduced as the bank increases its lending to small businesses -- providing a strong incentive for new lending to small businesses so that these firms can expand and create jobs, Treasury says. More than $4 billion has been invested in 332 institutions through the SBLF. As of Dec. 31, 2012, the average rate paid by community banks on SBLF capital was 1.8%. Individual community banks can reduce the rate they pay to 1% if they increase qualified small-business lending by 10% over their baseline. 2. Half of small-business owners are looking to invest this quarter. Small business owners are split on their outlook for 2013, Inc.com says. Half said they plan to invest in things like marketing, technology and hiring in the second quarter, according to the latest SurePayroll Small Business Scorecard, which surveyed nearly 40,000 small business owners on their hiring and expansion plans this year.
However, another 50% are still cautious about the economy and don't have plans to invest in their businesses, Inc.com says. 3. Kabbage closes a $75 million debt facility. Small-business financing is a hot topic ever since the banks slammed their doors shut during the recession. Alternative lenders have been successful in getting capital to businesses eager to expand but struggling to find access to financing to do it. These lenders have been getting increased attention for their efforts. Kabbage is one example, specifically because of its niche focus on providing cash advances to e-commerce businesses. The alternative lender announced Wednesday that it closed on a $75 million credit facility, its largest financing transaction to date. Victory Park Capital led the debt financing, while existing equity investor Thomvest Ventures also contributed a significant amount, Kabbage said in a release. The debt facility will fund advances for the company's rapidly growing customer base and allow it to expand its reach to new customer segments and markets. "We have followed Kabbage since its inception and have been exceedingly impressed by the power of its innovative real-time data platform and the team's ability to scale over the last two years," said Tom Affolter, principal of Victory Park Capital. "There is a clear void in the market as traditional financing sources remain reluctant to lend. As a firm, we are excited to provide financing to Kabbage as it is uniquely positioned to deploy this capital to meet the demand for funding from small businesses." Since launching two years ago, Kabbage has extended more than 60,000 advances and expects to provide more than 100,000 in 2013 alone. "This facility represents an enormous vote of confidence from the institutional investment community in the Kabbage model and a significant milestone in our company's history" Kabbage CEO Rob Frohwein, said in the release. -- Written by Laurie Kulikowski in New York. Follow @LKulikowski To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com. >To submit a news tip, email: firstname.lastname@example.org.
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