A number of small banks used $2.1 billion in government cash intended to boost small-business lending to repay bailout funds from the financial crisis, a government watchdog said yesterday in a report that also concluded the banks lent less money than firms that did not take bailout aid, the Wall Street Journal reported today. Among the 332 banks participating in a small-business lending program run by the U.S. Treasury, 137 used more than half of the almost $4 billion disbursed by the program to help fund their exits from the Troubled Asset Relief Program (TARP), according to a new report by the special inspector general for TARP. The TARP program was set up to bail out financial firms during the 2008 crisis. The small-business lending program was available to community banks with less than $10 billion in assets.
