The US treasury department after all the drama has finally started to disburse loans to small businesses from the $30 billion small business lending fund. The fund authorized by Small Business Jobs Act of 2010 got signed into law last September. Till now $123 million has been released for small businesses and as a result of it half-dozen community banks have received funds last week.

Since the Small Business Lending Fund came into force it helped SMEs overcome lending challenges as community banks with less than $10 billion in assets started to receive capital from the SBA. Community banks are in a better position to make loans to small businesses as they rely on relationships and may have a better idea about risks concerning business owners. The community banks are not exposed to home mortgages as has been the case with their larger counterparts.

Truly, this is the first wave of capital provided by the small business lending fund. By the end of June, Treasury Department has received 869 applications that amount to $11.6 billion that is going to be disbursed from the $30 billion lending fund.

However, there is no schedule for when the rest of the money will flow into banks. There is just a vague statement from the Treasury that small business loan fund will be made available on a rolling basis in coming weeks.

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