Rep. Mike Thompson Announces $7.3 Million in Funding for Humboldt Community Bank

Congressman Mike Thompson (D-CA) today announced that Redwood Capital Bancorp in Eureka has received $7.3 million through the Small Business Lending Fund (SBLF). The SBLF, which was established as part the Small Business Jobs Act of 2010 that Rep. Thompson supported, encourages community banks to increase their lending to small businesses, helping those companies expand their operations and create new jobs.

“Small businesses are the backbone of our economy, and Redwood Capital will be providing the capital they need to grow and thrive,” said Rep. Thompson. “In the process, they'll be helping create good-paying jobs and laying the foundation for private-sector job growth. I'm thrilled by today's announcement.”

Small businesses play a critical role in the U.S. economy and are central to growth and job creation. Yet, small business owners have faced disproportionate challenges in the aftermath of the recession and credit crisis, including difficulty accessing capital. The SBLF helps small businesses meet this challenge by providing capital to community banks that hold under $10 billion in assets. The dividend rate a community bank pays on SBLF funding is reduced as that bank increases its lending to small businesses - providing a concrete incentive for new lending to small businesses.

“We appreciate the U.S. Department of the Treasury for including Redwood Capital in the Small Business Lending Fund program,” said John Dalby, President and Chief Executive Officer of Redwood Capital Bancorp and Redwood Capital Bank, respectively. “This allows community banks and small businesses to work together to help create jobs and promote economic growth in rural communities across the nation. Redwood Capital will use the SBLF proceeds to expand our local investment in small business loans with the goal of continued growth for the economy of Humboldt County.”

In total, 43 community banks across the country have received a total of $590 million in SBLF funding. Additional SBLF funding announcements will be made on a rolling basis in the weeks ahead.

“We are excited to hear that two of the banks slated to receive new funding are in Northern California. Our region's entrepreneurs need a shot in the arm, and nearly $20 million dollars in capital will bring a lot of new opportunities with it,” said Kristin Johnson, regional director of the Northern California Small Business Development Center Network hosted by Humboldt State University.

In 2010, California Small Business Development Centers provided free business advising and low-cost workshops to more than 50,000 businesses throughout the state. Access to capital is the number one stated need from SBDC clients, Johnson said.