Three states have qualified to get large money from the Treasury Department. Connecticut, Vermont, and Missouri are slated to receive an infusion of money. The Treasury Department has authorized $53.4 million worth of lending money for those states. All three states have created programs that are intended to stimulate $10 worth of small business lending for every $1 invested.
What you should know about the Small Business Jobs Act
About 50 percent of private-sector United States jobs are in small businesses while in the last 15 years, about 64 percent of new jobs came from these businesses. Small business growth has been encouraged by Congress in the U.S.. The Small Business Jobs Act of 2010 was created to do this. The Treasury gave some states $1.5 billion in loan guarantees with the Act. This was only for states that planned on using programs such as loan guarantees to invest in smaller businesses in the state.
Connecticut’s $13.3 million plan
Companies are able to get insurance loans in Connecticut because of the Treasury department funds. The Connecticut Development Authority, a government-supported financial group, will be using the $13.3 million investment to insure investment portfolios. Nineteen financial institutions could be given access to the CDA funds to be able to provide loans to smaller businesses.
Vermont’s plan for $13.2 million for smaller businesses
The Treasury only needs to give Vermont $13.2 million for its plan. It plans on getting $132 million in small business lending from that. There could be business loans given to four programs. They will act like bad credit unsecured loans, not payday loans, for the companies. 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 companies. The Technology Loan Participation Program will get $3 million; that program aims to increase IT and Bioscience businesses in the state. About $1 million will go to portfolio insurance to lend. Another $5.9 million will go to building in Vermont with the Commercial Loan Participation Program.
Using $26.9 million in Missouri
Missouri qualified for the largest loan guarantee of the three states, at close to $27 million. There will be two funds for the money to go into. Businesses with less than 500 employees get help from the Grow Missouri Loan Participation Fund. About $10 million will go to that fund. 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.
Articles cited
CNN
money.cnn.com/2011/03/22/smallbusiness/state_small_business_credit_initiative/index.htm
Small Business Administration
sba.gov/advocacy/7495/8420
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