Congressman G. K. Butterfield (NC-01) today applauded the Obama Administration and the U.S. Department of Treasury in announcing the approval of the second round of State Small Business Credit Initiative (SSBCI) funding for North Carolina. The SSBCI funds are expected to help create new jobs and spur $461 million in additional small business lending in the state.
"Today's announcement is the delivery of a promise Democrats made to help restore the economy by investing in job creation," said Butterfield. "In addition to passing tax cuts for small businesses and championing the Recovery Act, these funds, as authorized in the Small Business Jobs Act, will help eligible small businesses gain the capital they need to grow and thrive. I applaud the Treasury Department and the Obama Administration for their commitment."
Overall, the SSBCI program supports small business lending programs in 56 states, territories, and the District of Columbia. It is an essential component of the Small Business Jobs Act that President Obama signed into law in 2010.
Under the Small Business Jobs Act, North Carolina can access a total of $46.1 million in SSBCI funds, which North Carolina expects will generate $461 million in additional private lending. SSBCI funds are made available to the state in three equal rounds of funding, and as such, the second tranche is $15.2 million. During the first round of funding, North Carolina's program supported 203 loans or investments to small businesses totaling $71.7 million, equal to private financial leverage of $6 for every $1 in federal contribution to date. Each individual loan or investment averaged $353,262.66.
Under the SSBCI, all states were offered the opportunity to apply for federal funds for state-run programs that partner with private lenders to increase the amount of credit available to small businesses. The Small Business Jobs Act permits the Secretary of the Treasury to grant special permission for municipalities to apply for a State's SSBCI allocation if such state did not submit a notice of intent to apply for participation in the SSBCI by November 26, 2010.
SSBCI participants must demonstrate a reasonable expectation that a minimum of $10 in new private lending will result from every $1 in federal funding. Accordingly, the $1.5 billion federal funding commitment for this program overall is expected to result in at least $15 billion in additional private lending nationwide.