The U.S. Department of the Treasury has announced that Michigan and North Carolina are the first in the nation to receive State Small Business Credit Initiative (SSBCI) funds, which will spur small business growth and create jobs across the country. The SSBCI is a new $1.5 billion initiative included in the Small Business Jobs Act, which President Obama signed into law in October. These funds will strengthen state programs that leverage private lending to help finance small businesses and manufacturers that are creditworthy but are not getting the loans they need to expand and create jobs.
“Small businesses depend on access to credit in order to hire and expand, and this funding will better position main street entrepreneurs to create new jobs and invest in their local communities,” said Treasury Secretary Tim Geithner. “Innovative public-private lending partnerships like the State Small Business Credit Initiative have a proven track record, and I am pleased this funding is on its way to Michigan and North Carolina to support job creation and economic growth in these states, with others soon to follow.”
Michigan received $79.1 million in SSBCI funding allocations, which is expected to generate more than $790 million in small business lending in the state, and North Carolina received $46.1 million, which will generate more than $460 million in lending to small businesses there. Funding will be administered through a designated agency or by contracting with a valid third-party entity. These agencies can start working with interested small businesses immediately.
“Expanding access to credit for small businesses is critical for speeding North Carolina’s economic recovery,” said North Carolina Governor Bev Perdue. “Two-thirds of new jobs are created by small businesses, and they employ our friends, neighbors and family members. We will use these federal funds to help those small businesses to grow, and that helps communities across our state.”
“I feel this is a very important program that will allow small businesses and manufacturers the opportunity to work through North Carolina bankers to acquire much needed capital,” said U.S. Rep. Walter Jones (R-NC).
Under the SSBCI, all 50 states, the District of Columbia, and the U.S. territories are offered the opportunity to apply for federal funds for programs that partner with private lenders to extend greater credit to small businesses. States are required to demonstrate a minimum “bang for the buck” of $10 in new private lending for every $1 in federal funding. Accordingly, the $1.5 billion funding commitment that the federal government will make for this program is expected to support $15 billion in additional private lending.
“Michigan’s leadership is being recognized today with this first in the nation award,” said Michigan Governor Rick Snyder. “As we work to re-invent our state government and reinvigorate our economy, we will be relentless in our support of job-creating small businesses across a wide spectrum of industries and sectors.”
“Small business owners tell me every day they’re ready to create jobs here in Michigan, but they can’t get loans to make the investments they need to grow,” said U.S. Rep. Gary Peters (D-MI). “I was proud to work with the Michigan Economic Development Corporation, the Administration, and my colleagues in the Michigan delegation to create this program to put our small businesses back on a level playing field, and to let them get back to doing what they do best: creating jobs.”