The U.S. Department of Treasury’s State Small Business Credit Initiative has provided federal funding to three additional states: Connecticut, Missouri and Vermont. This program is is a component of the Small Business Jobs Act signed by President Barack Obama last fall. The total amount to be divided is $534 million. Learn more about this in the following article from The Street.
Connecticut, Missouri and Vermont are the latest states getting federal funds for small-business lending initiatives.
Under the U.S. Department of Treasury’s State Small Business Credit Initiative, the states are expected to add $534 million in lending to small businesses and job creation. Connecticut is getting $133 million; Missouri is due $269 million; and Vermont will see $132 million.
The program, which supports state-level small-business lending programs, is a component of the Small Business Jobs Act signed by President Barack Obama in September. The applications were approved in conjunction with Tuesday’s conference hosted by the Treasury, “Access to Capital: Fostering Growth and Innovation for Small Companies.”
States partnering with private lenders can apply for the federal funds.
“These critical funds will help small businesses access the capital they need to expand their operations, create new jobs and continue supporting our nation’s economic recovery,” Treasury Secretary Tim Geithner said in a statement. “Public-private lending partnerships such as the State Small Business Credit Initiative have a proven track record of success, and I’m pleased that this funding is on its way to support economic growth in these states.”
Funding for California, Michigan and North Carolina were already approved. The Treasury said additional applications are expected to be approved in the coming weeks.
States must demonstrate that “a reasonable expectation that a minimum of $10 in new private lending will result from every $1 in federal funding,” the Treasury said. Approximately $1.5 billion has been allotted for the program and is “expected to result in at least $15 billion in additional private lending nationwide.”
Connecticut’s approved funding will support its 19-year-old Capital Access Program, which provides loan portfolio insurance to encourage private financial institutions to lend to creditworthy small businesses, according to the release. The program has provided portfolio insurance for about 630 enrolled loans, totaling more than $53.4 million and resulting in the creation of or saving of 6,120 jobs.
Missouri will use the funding to establish the high-tech Missouri IDEA (Innovation, Development and Entrepreneurial Advancement) Seed and Venture Capital Funds, which will promote the formation and growth of businesses that engage in the transfer of science and technology into job creation.
Missouri’s approved plan also allots $10 million of the funding to the Grow Missouri Loan Participation Fund. That program supports the formation and growth of businesses in the industrial, commercial, agricultural and recreational sectors by providing loans of up to $3 million to businesses with fewer than 500 employees, the release said.
Vermont’s approved plan dedicates $1 million of the state’s funding to support its Financial Access Program, which provides loan portfolio insurance to encourage private financial institutions to lend to creditworthy small businesses. The remaining $12.2 million is allocated to three additional programs:
- $5.9 million to its Commercial Loan Participation Program, which provides financing for buying land; construction and renovation of facilities; and purchase and installation of equipment for eligible projects.
- $3 million to its Technology Loan Participation Program, supporting loans to early stage firms primarily in the information technology and bioscience sectors.
- $3.3 million to its Small Business Loan Program, which finances smaller commercial businesses’ fixed asset and working capital needs.
This article was republished with permission from The Street.