Today, the U.S. Department of the Treasury and Vermont Governor Peter Shumlin announced the approval of Vermont's State Small Business Credit Initiative (SSBCI) application. Vermont's planned use of the SSBCI funds will help create new jobs and spur more than $132 million in additional small business lending in that state.
The SSBCI program, which supports state-level small business lending programs, is an important component of the Small Business Jobs Act that President Obama signed into law last fall.
"These critical funds will help Vermont small businesses access the capital they need to expand their operations, create new jobs, and continue supporting our nation's economic recovery," said Treasury Secretary Tim Geithner. "Public-private lending partnerships, such as the State Small Business Credit Initiative, have a proven track record of success, and I'm pleased that this funding is on its way to support economic growth in Vermont."
Under the Small Business Jobs Act, Vermont can access $13.2 million in SSBCI funds. Vermont expects to generate a minimum "bang for the buck" of at least $10 in new private lending for every $1 in federal funding. As such, this $13.2 million allocation for Vermont is expected to support more than $132 million in new private lending in that state. Vermont's SSBCI funds will be administered by Vermont Economic Development Authority (VEDA), which has 37 years experience in creating opportunities for small businesses, manufacturers, agricultural enterprises, and other businesses in Vermont.
"This $13.2 million in federal small business funding is terrific news for Vermont," said Vermont Governor Peter Shumlin, "and it would not have been possible without the strong advocacy efforts of our Congressional delegation. We thank Senator Patrick Leahy, Senator Bernie Sanders, and Congressman Peter Welch for their efforts, and also thank the U.S. Department of the Treasury for this well-timed award. With the help of Vermont's private sector leverage, these federal funds will go far, giving our small businesses the critical boost they need to create jobs for Vermonters."
U.S. Senator Patrick Leahy said: "The largest obstacle to job creation in this recession has been access to capital. This $13.2 million infusion of federal funds, the result of Congress' successful effort at including an all-state minimum in the program, is one of the most significant one-time influxes of capital VEDA has seen -- and it couldn't come at a better time."
U.S. Senator Bernie Sanders commented: "As I travel across the state and speak with small business owners, I keep hearing how difficult it is to get the credit needed for these businesses to expand and create decent paying jobs for Vermonters. It is essential that the federal government support local businesses -- and not just the giant banks on Wall Street that use government guarantees to speculate with taxpayer money. Clearly, we have an important role to play in terms of spurring small business lending. I am pleased that the availability of these funds will better enable the State of Vermont and Vermont's community banks to extend more loans to small businesses -- something our Vermont banks have done for years."
U.S. Congressman Peter Welch said, "One of the biggest concerns I hear from Vermont small business owners is their ongoing difficulty in accessing credit in our struggling economy, in spite of the best efforts of our community banks. Vermont businesses are strong and ready to invest. That's why we pushed so hard for this legislation. The announcement today is a real boost for small businesses that will give them the tools they need to create jobs and thrive."
"This is a great federal and state partnership and a great opportunity for VEDA to enhance access to capital for a myriad of Vermont businesses," commented Lawrence Miller, Secretary of the Vermont Agency of Commerce and Community Development. "VEDA has a proven track record and ability to leverage these dollars with private funds to help stimulate job creation in Vermont."
"We are eager to start putting this money to use, and working with our banking partners to help Vermont's economy grow," said Jo Bradley, VEDA's Chief Executive Officer.
Vermont's approved plan dedicates $1 million of the state's SSBCI funding to support its Financial Access Program, which provides loan portfolio insurance to encourage private financial institutions to lend to creditworthy small businesses. The remaining $12.2 million is allocated to three additional programs:
* Vermont has allocated a total of $5.9 million to its Commercial Loan Participation Program, which provides financing for the purchase of land; construction and renovation of facilities; and purchase and installation of equipment for eligible projects.
* Vermont has allocated $3.0 million to its Technology Loan Participation Program. This initiative supports loans to early stage firms primarily in the information technology and bioscience sectors.
* Vermont has also allocated $3.3 million to its Small Business Loan Program, which finances smaller commercial businesses' fixed asset and working capital needs.
Under the SSBCI, all states are 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. States 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 is expected to result in at least $15 billion in additional private lending nationwide.
Treasury Secretary Tim Geithner announced the approval of Vermont's SSBCI application during a conference today at the Treasury Department entitled, "Access to Capital: Fostering Growth and Innovation for Small Companies." The conference brings together policymakers, entrepreneurs, investors, academics, and other market participants to explore how both the public and private sectors can help promote access to capital at each stage of growth for a small business -- from seed capital, to growth equity, to accessing the public markets.