Small Business Banking RFQ
GROSSMAN ASKS BANKS TO JOIN EFFORT TO BOOST SMALL BUSINESSES AND SPUR ECONOMIC RECOVERY
Announces to Greater Boston Chamber of Commerce that invitation to participate is going out to 200 Massachusetts banks today
BOSTON - Saying that "helping small businesses grow is essential to Massachusetts's economic recovery," Treasurer Steven Grossman told a breakfast of the Greater Boston Chamber of Commerce's Financial Services Committee that his office today is sending official requests to participate in his Small Business Banking Partnership to more than 200 banks in Massachusetts.
The banking partnership seeks to boost small businesses in the Commonwealth by placing at least $100 million in state deposits with Massachusetts community, regional, and local banks willing to increase their small business lending efforts. Grossman moved to quickly fulfill a campaign promise by publishing proposed guidelines for the program last month, seeking comment from the public and the banking industry, and has followed up with today's formal request to banks to participate.
"Small businesses are the cornerstone of the Massachusetts economy," the Treasurer said. "According to state data, small businesses and sole proprietorships make up 85% of businesses in our Commonwealth. Experts say that historically two-thirds of the new jobs created in the Commonwealth come from small businesses. Clearly, a strong small business sector is critical to our recovery from the great recession and to Massachusetts's economic future."
"Notwithstanding the severe recession and ensuing tightening of the credit markets since 2008, many Massachusetts banks have maintained or grown their small business loan activities. We believe that depositing state funds, properly secured and at competitive interest rates, in local banks to support additional lending to creditworthy small businesses will be major step to help enhance the state's economic recovery," Grossman said.
The Treasury will have an open, rolling applications process for banks through at least September 1, 2011. It will start reviewing requests to participate and expects to start negotiating official agreements with participating banks by March 28. No bank will receive more than $5 million, and the Treasury will work to ensure that funds are allocated to all regions of the state including Gateway Cities. All decisions about loan terms, criteria, and marketing will rest with the participating banks. The request to join the program is being sent by the Treasury to all banks that are eligible to do business with the Commonwealth - about 200 institutions.
The program's guidelines were streamlined in response to recommendations from the banking industry and the public in response to Treasury's request for comments. "As someone who successfully ran a fourth-generation, family business for more 35 years," Grossman said, "I believe in being fast, flexible, and entrepreneurial. We believe we have created a program that meets your business needs as well as the needs of the Massachusetts economy."
The Treasurer called on the state's banks "to join us in this important step to help Massachusetts's economic recovery