Treasury Notes

 A Boost for California Small Businesses

By: Rosie Rios

Funding to help create jobs and spur $1.7 billion in lending to small businesses is on the way to California.

Today, the Treasury Department approved California’s plan for using its State Small Business Credit Initiative (SSBCI) funding allocation.  The SSBCI program, which supports state-level public-private partnerships to help spur small business lending, was a critical part of the Small Business Jobs Act that President Obama signed into law last September.

Small businesses have historically created two out of every three new jobs in our country. But when small businesses can’t access credit, they can’t invest in new equipment, expand their operations, or create new jobs. 

That’s why SSBCI is so important. It helps ensure that more small businesses can get the loans they need to hire, expand, and invest in their local communities. 

The design of the SSBCI program makes it especially effective. Because states partner with private sector lenders, taxpayers get a particularly big “bang for their buck.”

California’s SSBCI funding allocation is $168.6 million. But California expects to generate a minimum of $10 in new private lending for every $1 in federal funding. That means this $168.6 million in funding should support at least $1.7 billion in new private lending.

SSBCI funds are headed to states across the country.  Last month, I traveled to Detroit to announce that Michigan was one of the first two states in the nation to receive SSBCI funding. There, I had the opportunity to tour United Metal Products, a metal stamping plant that will benefit from the program.

Rosie Rios is Michigan

Rosie Rios at United Metal Products with Michigan Governor Rick Snyder

North Carolina has also recently received approval for $46.1 million in SSBCI funding, which will generate more than $460 million in lending to small businesses in that state.

There’s more to come. Other states across the country have the opportunity to apply for their share of the $1.5 billion in SSBCI funding available nationwide.  And because states must demonstrate a reasonable expectation that a minimum of $10 in new private lending will result from every $1 in federal funding, these SSBCI funds could result in $15 billion in additional private lending across the country.

That means more Main Street entrepreneurs will have the opportunity to turn their good ideas into good-paying jobs for people in their local communities. And that will help us to continue strengthening our nation’s economic recovery.

Rosie Rios is the Treasurer of the United States

Posted in:  Small Business
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