NEWS

WIRES

OTHER

Bank of America Awards First Round of Grants to Nonprofit Community Lenders for Microloans to Small Businesses

In the six weeks the grants have been available, CDFIs have used the funds to access nearly $27.5 million in microloan and other lending capital from the U.S. Small Business Administration (SBA) and U.S. Department of Agriculture (USDA), leveraging the original grant amounts by a more than a factor of seven. With this new capital, CDFIs expect to make 2,000 new microloans to small businesses and start-ups, serving 2,400 companies through lending and technical assistance. CDFIs expect this initial round of grants and federal capital will help retain or create nearly 4,000 jobs in local communities across the nation, which is critical to the economic recovery.

As the nation's largest CDFI lender, Bank of America recognized the need to immediately supply grants to nonprofit lenders for use as loan loss reserves to access SBA microloan capital before September 30, the end of the federal fiscal budget year. Federal funds for small business microloans have gone unused in past years due to CDFIs not having the loan loss reserves required - up to 15 percent of the amount borrowed depending on the program - to obtain the capital. Bank of America's loan loss reserve grants will continue to be available through December 2011 to help CDFIs access SBA and USDA funds over the next fiscal cycles.

Originally announcing the initiative at the National Urban League Centennial conference this past July, David Darnell, president of Bank of America Global Commercial Banking said, "Helping strengthen small businesses and new start-up companies stimulates job creation and is critical to our nation's economic recovery. Now is the time to be innovative and pursue every resource that helps small businesses grow.

"Bank of America is helping set opportunity in motion by directing private sector capital to unlock exponentially greater amounts of federal dollars for their businesses. We plan to fund as much as we can in the first 12 months, which we estimate will create up to 8,000 jobs total. Even the smallest grant enables a nonprofit lender to leverage an average of 10 times that amount to lend to small businesses, which creates a ripple effect on job growth, spending and overall economic expansion."

Gina Harman, president and CEO, ACCION USA, said, "Simply put, Bank of America gets it. Their efforts to support SBA microlenders with this innovative and timely program are just what we need to extend our efforts to support the nation's smallest of businesses.

"The grants preserve precious operating funds microlenders need to be effective - funds that otherwise would have been redirected as reserves for several years. The grants also ensure access to additional SBA loan financing, long-term capital that can be lent over time to new entrepreneurs. Microlenders, with the support of partners like SBA and Bank of America, are playing a key role in creating and retaining jobs by directly supporting thousands of small businesses across the country."

The first grant recipients serve small businesses in urban and rural communities in 17 states across the country. The grants have enabled the lenders to not only access low-cost loan capital but also expand their lending programs into new communities. Early results include:

• New York - six nonprofit lenders have used $900,000 in Bank of America grants to leverage $5.5 million in SBA microloan and 7(a) capital and USDA capital, helping to retain or create an estimated 1,212 local jobs.
• California - nine nonprofit lenders have used $790,000 in Bank of America grants to leverage $5.6 million in SBA microloan capital, helping to retain or create 713 local jobs.
• Minnesota - two nonprofit lenders have used $187,500 in Bank of America grants to leverage $1.25 million in SBA microloan capital, helping to retain or create 270 local jobs.
• Kentucky - two nonprofit lenders have used $191,100 in Bank of America grants to leverage $1.274 million in SBA microloan capital, helping to retain or create 75 local jobs.

The average SBA microloan size is $13,000 per business. Through these programs, CDFIs can borrow for 10 to 20 years at rates less than two percent - twice as long and half the cost of other CDFI lending programs currently available. Currently more than 175 nonprofit lenders participate in these programs.

Bank of America is the nation's largest investor into CDFIs, with more than $1 billion in loans and investment to 120 CDFIs in 37 states. This work with CDFIs is part of the company's broad support for small businesses, which includes a pledge to increase lending to small and medium-sized businesses by $5 billion in 2010. In the first half of this year, Bank of America has provided $45.4 billion to small and medium-sized companies.

Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with 5,900 retail banking offices, more than 18,000 ATMs and award-winning online banking with 29 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

www.bankofamerica.com

Reporters May Contact:
Colleen Haggerty, Bank of America, 1.213.621.7414
colleen.haggerty@bankofamerica.com