$55 Million to California Businesses
Through the State Small Business Credit Initiative (SSBCI), the U.S. Department of the Treasury announced today the transfer of $55,645,861 to the Governor’s Office of Business and Economic Development and the California State Treasurer’s Office to expand California’s small business lending programs. The funds will be used to leverage private loans and investment in California small businesses, often by partnering with local community banks. According to the most recent SSBCI quarterly report, participating states accelerated their expenditure, obligation or transfer of SSBCI funds in 2013, more than doubling the amount reaching small businesses during the first three quarters of last year.
“California continues to leverage federal State Small Business Credit Initiative funds to attract new loans and investments to the state’s small businesses,” said Cyrus Amir-Mokri, Treasury Assistant Secretary for Financial Institutions. “These funds are intended to continue the state’s partnership with local entrepreneurs and small business owners to provide new sources of capital, help create jobs, and improve the economy.”
“The State Small Business Credit Initiative is helping small businesses in California access much needed capital and do what they do best: drive innovation and create jobs,” said U.S. Congresswoman Judy Chu (D-CA) and member of the House Small Business Committee. “The $55 million this program is bringing to California is only the tip of the iceberg—as it is leveraged with private funds, we will see new investments and expanded payrolls throughout the state.”
“These funds will launch a new wave of lending that will help small businesses thrive, expand and create jobs,” said California State Treasurer Bill Lockyer. “Microloans have been especially successful in helping businesses in low-and moderate-income communities.” Half of this disbursement of federal funds will be used by the California Capital Access Program (CalCAP), which is administered by the State Treasurer’s Office and encourages lenders to make low-cost loans to small businesses that have difficulty obtaining financing.
SSBCI was created by the Small Business Jobs Act of 2010, which President Obama signed into law on September 27, 2010. Funded with $1.5 billion, the program is expected to spur up to $15 billion in new lending to small businesses and manufacturers as states use federal funds to leverage private investment dollars.
SSBCI is an innovative federal program that channels funds directly to state agencies for lending and investing programs. Treasury awarded allocations in all fifty states by early 2012, based on a formula set by the Small Business Jobs Act that considered population and unemployment levels. Each state in turn designed its own SSBCI program in response to local economic conditions and capacity. Existing and new state programs are eligible to receive SSBCI funds. The program has helped stand up 82 new small business support programs across 40 participating states.
For more information on California’s SSBCI-funded programs, please visit ibank.ca.gov (Loan Guarantee Program) orwww.treasurer.ca.gov/cpcfa/calcap (Capital Access Program). For more information on SSBCI and Treasury’s other small business programs, please visit www.treasury.gov/smallbusiness.