Washington, DC - The U.S. Treasury Department's State Small Business Credit Initiative (SSBCI) today released a new Annual Report detailing how the program continues to help small businesses grow and create jobs nationwide. Through 2014, participating states expended $864 million in program funds, which spurred more than $6.4 billion in private sector lending and investment to small businesses. Business owners reported that these funds will help them retain or create nearly 141,000 jobs.
"Entrepreneurs need capital to start, grow, and expand their business, but many new businesses lack collateral, have short credit histories, or need smaller loans, which can make it difficult for them to secure financing," said Jeffrey Stout, Director of SSBCI. "The State Small Business Credit Initiative was created to promote access to capital for small businesses by supporting state-run programs that help close the credit gap and aid local economic development efforts. Today's report shows that the program has been a catalyst for billions in private sector loans and investments and created jobs."
SSBCI is designed to help spur new private sector lending or investments in small companies by leveraging the federal support offered by the program. Through 2014, states were able to generate $7.36 in private sector lending and investments for every $1 of federal support.
Participating states, municipalities, and territories have made considerable progress in deploying these funds to support economic growth locally. In 2014, participants that deployed the most SSBCI funds by percentage of allocation included: Vermont, North Dakota-Mandan Consortium, Idaho, South Carolina, Michigan, Alabama, Puerto Rico, Montana, Oregon, and Colorado. The states that have deployed the most SSBCI funds by dollar amount included: California, Michigan, Florida, Illinois, North Carolina, Texas, Ohio, Alabama, Georgia, and New York.
SSBCI was created when President Obama signed into law the Small Business Jobs Act on September 27, 2010. Through SSBCI, the Treasury Department will award nearly $1.5 billion to state programs across the country that support small businesses, including small manufacturers. The Treasury Department awarded allocations to 47 states, the District of Columbia, five territories, and municipalities in three states by early 2012 based on a formula set by the Small Business Jobs Act that considered population and unemployment levels. Each state designs its own small business programs, and five types of programs are eligible for SSBCI funds: capital access, loan guarantee, loan participation, collateral support, and venture capital programs.
To build on the momentum of the program's success and capitalize on new working relationships among states and small business lenders and investors, President Obama proposed an extension of SSBCI in his Fiscal Year 2016 Budget request with an additional $1.5 billion in funding. A new authorization of the SSBCI program will keep local economic development efforts strong and allow states to continue supporting small businesses, job creation, and greater levels of private lending and investments.
