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Treasury Releases SBLF Term Sheets for Sub S, Mutual Institutions

Posted on 5/13/2011

The US Treasury yesterday posted long-awaited terms sheets enabling Subchapter S and mutual institutions to participate in the Small Business Lending Fund.

Treasury explained that qualifying institutions may participate in the fund by issuing senior securities -- unsecured subordinated debentures eligible for inclusion in an institution's Tier 2 capital -- to Treasury. The interest rate payable on the senior securities will be reduced as the participating institution increases its lending to small businesses.

The interest rates have been adjusted to reflect after-tax effective rates equivalent to the dividend rate paid by other classes of institutions participating in the SBLF through the issuance of preferred stock.

The application deadline for Subchapter S corporations and mutual institutions is June 6. The deadline for C corporation banks and savings associations is May 16.

To read more visit: www.treasury.gov/resource-center/sb-programs/Pages/Overview-for-S-Corporation-Banks-and-Mutual-Institutions.aspx


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