Massachusetts Treasurer Steven Grossman this week doubled the amount of his department's deposits in Belmont Savings Bank, where now $10 million in state funds is being used to promote loans to small creditworthy local businesses in and around Belmont.
“The Small Business Banking Partnership has been a resounding success, and it’s a great example of an innovative public-private collaborative,” said Grossman of the program that includes 47 community banks that have more than $250 million in state deposits.
In exchange for the infusion of new deposits, the banks sign a Memorandum of Understanding (MOU) signaling their intent to enhance their loan portfolios to
small Massachusetts-based businesses. According to the most recent reporting data, participating banks have made a total of 1,678 loans worth over $268 million, many of them directly attributable to the Partnership.
“The Treasurer recognizes the vital role of community banks in continuing to improve the local economy, and we are thrilled to be doing our part to assist the growth of small business," said Robert Mahoney, president and CEO of Belmont Savings Bank.
"Keeping state dollars local in a simple, manageable program that is not cumbersome for community banks to manage has been the key to the success of this program. The Treasurer has been a real ally for community banks and community businesses,” said Mahoney.
All deposits that the Treasury makes in these community banks are protected through either insurance or collateral, and the interest rate on the money is comparable to what the Commonwealth receives at out-of-state financial institutions.