Small businesses may find it easier to obtain bank loans under legislation passed by the General Assembly.
The Lend Local Act, which was filed in the House of Delegates and state Senate, was amended to create a linked deposit program for small businesses in the Department of Housing and Community Development, putting up to $50 million in state money into local banks. Businesses that qualify can get loans at 2 percentage points below market rates.
Originally, the bill would have given community banks a preference when the state treasurer deposits Maryland dollars, provided those banks agreed to use the money for small business loans.
SB 792 easily passed in the Senate on Saturday as the chamber decided to accept House amendments to the bill. The House version passed both chambers earlier this week.
Gov. Martin O’Malley still must sign the legislation into law.
Sen. Robert J. Garagiola, D-Montgomery, said passage was a win for small businesses.
“I have a lot of clients who have expressed difficulty over the last two or three years in getting capital,” said Garagiola, a lawyer.
“So many of our businesses go to the Wall Street banks … and can’t get the time of day,” Frick said.