Recently, as part of the Small Business Jobs Act, the U.S. Department of Treasury announced its approval of applications for State Small Business Credit Initiative (SSBCI) funding. The funds are part of the legislation, signed into law by President Obama last fall, which includes tax breaks of $50 billion for small businesses and the extension and expansion of Small Business Administration lending programs.
Applications from Washington, D.C. and 11 states including Ohio were approved as a means to create new private sector jobs and prompt additional small business lending. The SSBCI provides funds for the next 10 years in grants for states to support small business lending programs.
Under the SSBCI, federal funding is made available to state programs that partner with private lenders and investors to help finance small businesses and manufacturers that are creditworthy, but are not getting the loans they need to expand and create jobs. The SSBCI will allow states to build on successful models for state small business programs, including collateral support programs, Capital Access Programs (CAPs) and loan guarantee programs.
The approval of Ohio’s application will allow the state to access $55.1 million in federal money. Ohio’s Department of Development announced it will use these funds for three programs:
A requirement of the SSBCI is that states are required to show a reasonable expectation that every $1 in federal funding will lead to a minimum of $10 in new private lending. Therefore, the total $55.1 million in federal funding for Ohio is expected to result in at least $551 million in new private lending in the state.