In Coralville, Iowa, a small medical device company called Corvida Medical needed early stage financing to hire staff and take its innovative product, which enables the safe handling of hazardous drugs used in the preparation and administration of chemotherapy, to market. That’s where the Iowa Economic Development Authority (IEDA) and Treasury’s State Small Business Credit Initiative (SSBCI)
stepped in. The IEDA is one of the 57 state, territorial or municipal entities currently operating SSBCI-supported small business programs across the country. In this case, the IEDA loaned $500,000 to Corvida Medical through the Iowa Innovation Acceleration Fund, which the company used to leverage private investment. Today, the company has raised millions in additional funding and soon its product could be protecting healthcare providers from the risk of exposure to hazardous drugs.
Stories like Corvida Medical’s are playing out across the country as states accelerate their use of SSBCI funds to attract greater levels of private loans and investment in local small businesses. Today, SSBCI released its most recent Quarterly Report
showing that the program passed two major milestones in 2013. First, SSBCI disbursed more than $1 billion
to state economic development agencies to support small business lending and investment by the end of last year. By the same quarter-end, state programs had also expended, obligated, transferred, or recycled more $750 million, or 51 percent of the nearly $1.5 billion allocated for the program by the Small Business Jobs Act of 2010.
The results of the innovative SSBCI funding model – along with the success of the program through last quarter – help explain why President Obama proposed an extension of SSBCI and an additional $1.5 billion in funding in his FY 2015 budget this week. An extension would capitalize on new working relationships between states and small business lenders and investors, and strengthen the federal government’s support of state economic development agencies that are highly responsive to capital needs in local markets. Treasury looks forward to working with Congress on the President’s proposal to support greater access to capital for small businesses so they can grow and hire.
For now though, funds deployed through the current program continue to make a difference. Today’s report is not only good news for creditworthy entrepreneurs looking to turn their good ideas into reality; it is good news for economic development and job creation in communities across the nation.
Matt Bevens is a Media Affairs Specialist at the United States Department of the Treasury