Parent co. of local bank receives funds for small business loans
WILLMAR -- Heritage Bancshares Group Inc., the parent company of Heritage Bank NA, announced Thursday it received $11 million through the Small Business Lending Fund of the U.S. Treasury Department.
The funding will provide up to $110 million in additional loans to local businesses and farmers and raise the legal lending limit at Heritage to more than $6 million.
"This program means lower interest rates to qualifying borrowers over the next 4½ years. That will help give small businesses and farmers the opportunity to expand their business, hire additional workers, and spur growth in the communities we serve," says Tom Geiger of Heritage Bancshares Group. "The doors at Heritage Bank are always open to small businesses in our region."
Heritage has 13 locations in Minnesota and Iowa.
"We are honored to be one of the healthy financial institutions that the Department of the Treasury selected to participate in this program," Geiger said. "Heritage has always maintained the goal of helping customers achieve financial success.
The (Small Business Lending Fund) is one more great tool to help us serve that mission."
Among other banks across the nation that received funding from the same program was Kerkhoven Bancshares Inc., which received $1.5 million, according to the Treasury website.
Banks will have a powerful incentive to expand lending to small businesses, spur new investment and job creation, said Neal Wolin, Treasury deputy secretary.
The fund was established as part of the Small Business Jobs Act of 2010 and encourages community banks to increase their lending to small businesses by providing capital to community banks that hold under $10 billion in assets, according to officials.
The dividend rate a community bank pays on the funding from the Small Business Lending Fund is reduced as that bank increases its lending to small businesses, providing a strong incentive for new lending to small businesses to expand and create jobs.
According to Treasury officials, small businesses play a critical role in the U.S. economy and are central to growth and job creation. Small businesses employ roughly half of all Americans and account for about 60 percent of gross job creation. But small businesses faced disproportionate challenges in the aftermath of the recession and credit crisis, including difficulty getting access to capital, according to a federal statement.