Delaware Governor Jack Markell and Senators Tom Carper and Chris Coons last Friday highlighted yet another small business that has received from funding through the Treasury’s State Small Business Credit Initiative (SSBCI) to grow and invest in its community.
The SSBCI is a component of the President’s Small Business Jobs Act signed into law in 2010 that helps to unlock credit for small businesses. Under the SSBCI, the Treasury Department provides funding for new and existing state-run programs that partner with private lenders and investors to increase the amount of credit available to small businesses.
In Delaware, the Delaware Economic Development Office (DEDO) has made a commitment to use $13,168,350 in SSBCI funds over the next five years to support a loan participation program. Frankfurt Bakery in Kent County is one small business that recently benefited from the initiative.
After nearly five years in operation, Frankfurt Bakery was about to see a large increase in its rent. Instead, with the help of DEDO and SSBCI, owner Andreas Janke was able to secure $200,000 in capital to purchase a building to expand his small business’ operations, a move that will result in three full-time positions and two new part-time jobs. Small businesses like Frankfurt Bakery are important parts of their communities, and Mr. Janke notes that he sends surplus food to local homeless shelters.
Here is what Delaware elected officials had to say about SSBCI and Frankfurt Bakery:
“Supporting small businesses in Delaware is critical to our overall economic development and growth,” said Governor Markell. “They provide valuable goods and services, enhance the quality of life for the communities in which they operate and, most importantly, help put Delawareans back to work.”
“The State Small Business Credit Initiative is helping small businesses gain access to capital to make improvements, expand and hire more workers,” said Sen. Tom Carper (D‐Del.). “This important lending program creates a nurturing environment for the businesses that support our communities to grow, even during challenging economic times, while also generating a great return on taxpayers’ investment. That’s what I call a win‐win for Delaware. I want to offer my congratulations to the Frankfurt Bakery for being the first business in Kent County selected for this innovative program and I can’t wait to taste the fruits of their labor.”
“The Frankfurt Bakery and Sandwich Shop has found a recipe for success—hard work, determination and dedication blended together with access to funding through programs such as the U.S. Treasury’s State Small Business Credit Initiative,” said Sen. Chris Coons, (D‐Del.). “Local, state and federal programs must work together to support small business owners like the Jankes. If small businesses continue to grow and hire new employees, that will drive our economic recovery.”
To be eligible for SSBCI funding, state programs needed to demonstrate a reasonable expectation that the federal funds would result in at least $10 in new private financing for every $1 in federal funding. Accordingly, the $1.4 billion allocated by Treasury is expected to support more than $14 billion in additional private financing for small business across the country.
Through the SSBCI, all 50 states, the District of Columbia, and the territories were 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. DEDO’s program in Delaware encourages local lenders to provide capital to small businesses at lower cost through a loan participation program.
The SSBCI allows states, territories and eligible municipalities the opportunity to build upon or create successful models for state small business programs, including Capital Access Programs (CAPs), collateral support programs, loan participation programs, loan guarantee programs, and venture capital programs.
For more information in your state, contact your state’s SSBCI-supported programs directly.
Don Graves is Deputy Assistant Secretary for Small Business, Community Development and Housing Policy