$10 Million Small Business Grant Program Being Offered by Bank of America

The Bank of America, the largest bank holding company in the United States, by assets, and the second largest bank by market capitalization, recently implemented a new $10 million grant program to support nonprofit lenders aid small and rural businesses.

The program was formally announced yesterday, the grants would be used to render support to various community development financial institutions and other nonprofit lenders meet necessary reserve levels and thereby access millions of dollars in new low-cost capital, according to Bank of America.

The BofA grants are available to 501(c)3 nonprofits enrolled in the SBA’s 7(a) and micro loan programs as well as the USDA’s upcoming micro loan program. Unfortunately, since credit unions are 501(c)1 and 501(c)14 nonprofits, they are not qualify for this grants.

BofA new small business grant program involves leveraging funds from the SBA and the U.S. Department of Agriculture. Nonprofit lenders participating in these federal loan programs must save loan loss reserves up to 15% of the capital provided by the agencies. However, because of the economic recession, a lot of lenders did not meet the allotted reserve requirements, limiting their access to loan capital at a time when small businesses most need this support, the bank said.

“The new grant program is intended to give these financial intermediaries the ability to increase their lending capacity by drawing down on their SBA and USDA loan facilities,” Jefferson George, a Bank of America spokesman, said.

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