Treasury Approves $360M for State Small Business Lending

The U.S. Department of Treasury has released details on its latest funding approvals from the State Small Business Credit Initiative (SSBCI). Eleven states, and Washington, D.C., are slated to receive a portion of the $360 million that will be used to expand state small business lending and capital programs. In order to qualify, states must demonstrate that their relevant programs will generate at least $10 in new private lending for every $1 in federal funding. As such, Treasury expects the funding to generate more than $3.6 billion in additional small business lending and to create new private sector jobs.

Florida is due to receive the largest single allotment of the funds during this set of approvals. The state plans to use its $97.7 million to create a new capital access program to provide portfolio insurance for small business loans. FL-CAP, managed by Florida's Division of Strategic Business Development (DSBD), will operate with separate loan loss reserves for each participating financial institution. DSBD also will partner with Enterprise Florida for two other new programs supported by the SSBCI funding. The first, a venture capital program, will invest directly in Florida startups. The second is a small business loan program that will provide loan guarantees, loan participations and direct loans in the areas of commercial banking and export finance.

Ohio has been allotted $55 million in SSBCI dollars for its programs. The Ohio Department of Development (ODOD) plans to use the funding to support its Capital Access Program, which encourages state chartered financial institutions to make loans to for-profit or nonprofit small businesses that are having difficulty obtaining business loans through conventional underwriting standards. ODOD also will launch a new cash collateral program and the Targeted Investment Program, a venture capital program that will target small businesses in manufacturing, production and logistics.

Other state venture capital programs that will be launched using the SSBCI funding include Iowa's Demonstration Fund Program, Louisiana's Seed Capital Program, Tennessee's INCITE Fund and Texas's Small Business Venture Capital program.

Read the announcement at: http://www.treasury.gov/press-center/press-releases/Pages/tg1278.aspx.