Miami bank gets $250 million from Treasury for loans to minority businesses

Banesco USA, a Miami bank focused on commercial lending in South Florida and Puerto Rico, has received a $250 million capital injection from the U.S. Treasury, which will allow it to increase lending to small and large companies, especially those owned by minorities.

The funds are part of the Emergency Capital Investment Program, which supports minorities most economically affected by the ongoing Covid-19 pandemic.

“We are the only bank in Florida and Puerto Rico that was chosen for this investment, and we understand that it is a vote of confidence from the government in our institution,” Calixto García-Vélez, CEO of Banesco USA, told el Nuevo Herald.

Banesco, headquartered in Coral Gables and with branches in Hialeah, Aventura and Brickell, and in San Juan, Puerto Rico, meets the requirements to distribute the funds in business loans over 10 years.

With U.S. inflation running at 9.1% in June and the Federal Reserve’s second 0.75% increase in interest rates in two months, businesses need financial help.

The Greater Miami area is the one that proportionally has the most companies with fewer than 50 employees in the country, and small businesses are most affected by the ongoing pandemic. While many have since seen a strong recovery, others are being hurt by inflation and rising commercial rents.

García-Vélez said Banesco has specialized in commercial loans and in providing direct and personalized attention to Miami businesses.

With the money from the Treasury, Banesco will be offering lower interest loans, which can be used by business owners to invest in their business, buy new equipment, acquire a new location or improve the one they already have.

“The government gave us this capital at a lower cost, and it wants us to put this money to work for our communities, so we can offer a lower interest rate,” García-Vélez said.

The executive explained there is a lot of demand from small and medium-sized entrepreneurs, and also from professionals such as dentists, doctors and lawyers, to obtain mortgages or credit lines.

To qualify for the new lending program, a company must have been operating effectively for at least two years and meet other standard commercial lending requirements.

These loans will have no size limit. It doesn’t matter if it is $50,000 or $20 million, the Banesco executive said.

The small bank known for catering to smaller companies plans to open another area branch in Doral.

“We want to help small businesses navigate the financial system,” García-Vélez said. “We can come to your office if it is necessary.”