“The process to apply and the ‘user-friendly’ nature of SSBCI make it
an attractive credit enhancement tool for Home Federal Bank.” -- Home Federal Bank’s Assistant Vice
President and Relationship Manager Casey Taylor
“Without this loan, I would not
have been able to expand my business into Boise or hire additional support to
staff my new location.” —JumpTime owner
Small business owners face disproportionate challenges in the aftermath
of the recession and credit crisis, including difficulty accessing capital. Treasury’s State
Small Business Credit Initiative (SSBCI)—a critical component of the
Business Jobs Act—helps to unlock credit for small businesses. Since 2011, SSBCI has provided funding for
new and existing state-run programs that partner with private lenders
and investors in order to leverage $10 in private lending to and investments in
small businesses for every $1 in public funds.
Idaho uses its $13,168,350 SSBCI allocation to fund a Collateral Support Program (CSP). In a CSP, the state covers a collateral
shortfall with a deposit at the lending institution. In just over one year, Idaho’s CSP has
committed or spent $6,464,017 in over 75 companies, which has helped promote
economic activity in the State while leading to the creation of 242 new jobs.
One of those local Idaho businesses is
JumpTime Idaho. Owner Chad Babcock, a former
All-American collegiate gymnast, always aspired to train the next generation of
athletes. After years as owner and
manager of two other gymnastics companies, he saw a new niche prospect: an indoor
Mr. Babcock contacted Home Federal Bank, a community bank serving parts
of Idaho and Oregon, hoping to secure a loan.
Loan officers at the bank saw the project’s potential but felt that Mr.
Babcock needed additional collateral to secure the loan. This mismatch
between available credit and credit-worthy borrowers is where SSBCI loan
programs are most useful.
Home Federal Bank is an experienced participant in the SSBCI. The bank quickly received a favorable
response from Idaho and was issued $30,000 in collateral support to address JumpTime’s
collateral shortfall, which allowed the bank to complete the loan.
In October 2010, Mr. Babcock
successfully launched JumpTime Idaho, an indoor trampoline park, in Meridian,
Idaho. Mr. Babcock opened a second
facility in Boise and is considering expansion opportunities. Opening his second facility created 20 new jobs.
Through the SSBCI, all 50
states, the District of Columbia, and the territories are eligible for federal funds for programs
that leverage private lending to help finance small businesses and
manufacturers that are creditworthy, but are not getting the loans they need to
expand and create jobs. For more
information on specific state, contact the state’s
SSBCI-supported programs directly.
Clifton Kellogg is Director of the State Small
Business Credit Initiative
at the U.S. Department of the Treasury.