Even when the Treasury Department starts disbursing the $11.6 billion in funds applied for under the $30 billion small-business lending fund, the effect is expected to be negligible at best. "The vast majority of community banks are already well-capitalized," said Paul Merski of the Independent Community Bankers of America. Merski also notes that there is still little demand for small-business loans, and banks "don't want to get stuck paying interest on capital they're not able to use."

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