Treasury kicks off small business lending with $53.4 million
Three states have qualified to get big money from the Treasury Department. The Treasury Department has infused $53.4 million into lending programs in Connecticut, Vermont and Missouri. All three states have created programs that are intended to stimulate $10 worth of small business lending for every $1 invested.
The Small Business Jobs Act
Small businesses in the United States represent about 50 percent of all private-sector jobs in the United States, and 64 percent of new jobs created in the last 15 years have been created by small businesses. In order to encourage small business growth and hiring in the United States, Congress passed the Small Business Jobs Act in 2010. The Act authorized the Treasury to hand out $1.5 billion in loan guarantees to states with solid plans to increase small business investment through loan guarantees and other lending programs.
Connecticut’s $13.3 million plan
Connecticut’s plan, now funded and supported by the Treasury department, is to provide business insurance loans. The Connecticut Development Authority, a government-supported financial group, will be using the $13.3 million investment to insure investment portfolios. Nineteen financial institutions will be given access to the CDA funds in order to provide loans to small businesses.
Vermont’s plan for $13.2 million for small businesses
Vermont expects that the $13.2 million in small business credit from the Treasury will spur $132 million in new small business lending. Four programs will each get a share of the business loans, which are similar to bad credit personal loans not payday loans. And $3.3 million will go to the Small Business Loan Program, which provides loans that support purchase of fixed assets (such as equipment) for businesses. The Technology Loan Participation Program will get $3 million; that program aims to increase IT and Bioscience businesses in the state. Vermont will use $5.9 million to fund the Commercial Loan Participation Program, which helps build facilities, and the final $1 million will go the portfolio insurance for lending institutions.
How Missouri will spend $26.9 million
Missouri qualified for the largest loan guarantee of the three states, at close to $27 million. The money will be distributed to two separate funds. $10 million will go into the already-established Grow Missouri Loan Participation Fund, which is specifically focused on businesses that employ 499 or fewer people. The Loan Participation Fund provides loans of up to $3 million to help state businesses grow. The final $16.9 million will create a new venture capital fund that will focus on high-tech startup businesses.