The U.S. Department of Treasury’s State Small Business Credit Initiative (SSBCI), a program aimed at spurring job creation by providing federal funding to states to fuel loans to cash-strapped small businesses, is supplying a desperately needed boost to the nation’s entrepreneurs.
With access to credit for small businesses to expand their operations being virtually non-existent as the country remains mired in a credit crisis and public and private sector hiring at a standstill, SSBCI, a core component of the Small Business Jobs Act signed into law by President Obama last fall, expects to stimulate as much as $15 billion in new lending to small business owners.
According to the Treasury Department, every dollar of the initial $1.5 billion the act allocates to the program is expected to generate a minimum return on investment of $10 in new private lending.
“These funds will provide critical support to state-level programs that help expand small business lending and spur private sector job growth,” Neal S. Wolin, Deputy Secretary of the Treasury, said last month. “Unlocking credit for small businesses will provide a powerful boost for investment and job creation in local communities across the country.”
In its initial round of awards, the Treasury Department announced last month that 11 states had already been granted funds, including Florida, Texas and Ohio, among others.
And last week, Governor Andrew Cuomo announced that New York State was the latest awardee of SSBCI funding, as the state was allocated $55.4 million, which is expected to support approximately $554 million in lending to the state’s struggling entrepreneurs.
“With this new funding, we can spur new investment in small businesses,” said Cuomo, “which is essential to creating the jobs that will get New York’s economy working again.”
Of the states that have been granted funds thus far, New York’s award was second only to Florida, which received $97.7 million, and just ahead of Ohio’s $55.1 million. Other states receiving funds include Alabama, Idaho, Iowa, Louisiana, Mississippi, Oregon, Tennessee, Virgina and Washington D.C.
“Well functioning credit markets provide entrepreneurs with the financing they need to commercialize innovation, seize marketplace opportunities, and compete internationally resulting in hiring and economic expansion,” a July 2010 report from the U.S. Chamber of Commerce concluded.
And according to the U.S. Small Business Administration, small businesses employ a little over half of all private sector employees and have been responsible for approximately two-thirds of new jobs created over the past 15 years.
“This program will help ensure that more Main Street entrepreneurs have access to the credit they need to expand their businesses and create new jobs,” said treasurer of the United States Rosie Rios.