Bank of America (Stock Quote: BAC) is again increasing its commitment to lending to small and medium-sized businesses, a top executive has told TheStreet, answering critics who knocked the top institutions for sitting on taxpayer bailout cash instead of helping ease the Great Recession. The bank's response has already made believers out of some of the greatest skeptics, but David C. Darnell, president of Global Commercial Banking for Bank of America Merrill Lynch (BAC) , says there's more to come.
The largest of U.S. banks, Bank of America reported $2.4 trillion in assets at the end of the second quarter. Late last year, amid industrywide criticism, it announced 2010 would see an increase in lending to small- and medium-sized businesses by at least $5 billion. Last month, it announced having loaned $45.4 billion to these businesses during the first half of the year, an increase of nearly $9 billion over the same period last year. Because the bank doesn't release similar figures for the years before it accepted TARP funds and disclosure was mandated, it's difficult to gauge how impressed to be.
Bank of America isn't alone in pledging increased funding for small- and medium-sized businesses.
Chase, the consumer and commercial banking arm of business of JPMorgan Chase (JPM) (Stock Quote: JPM), has pledged a $4 billion increase this year in lending to small businesses (which it defines as having annual sales of less than $20 million) to a total of $10 billion. Wells Fargo (WFC) announced plans to loan as much as $16 billion this year to businesses with less than $20 million in revenue, an increase of $3 billion over last year.
But the bank also recently announced it will provide $10 million in grants to nonprofit lenders to leverage funds from the U.S. Small Business Administration and the U.S. Department of Agriculture for small and rural businesses. The grants, for use as loan loss reserves, could unlock as much as $100 million in capital.