Governor Steve Beshear today announced a major small business initiative that will provide Kentucky's small businesses with access to nearly $155 million in new loans to help with job creation across the state.
The Kentucky Small Business Credit Initiative involves three new small business programs implemented by the Kentucky Cabinet for Economic Development to facilitate increased private lending to Kentucky's small businesses. The programs include: the Kentucky Capital Access Program; the Kentucky Collateral Support Program; and the Kentucky Loan Participation Program.
Gov. Beshear announced the initiative at the Coldstream Center, part of the University of Kentucky's Coldstream Research Campus, in Lexington with lawmakers, business leaders and United States Treasurer Rosie Rios. The Coldstream Center houses 25 small businesses with more than 300 employees. Several of these businesses are recipients of federal small business grants.
"This program is great news for the Commonwealth and another critical step in the right direction toward improving the Kentucky economy," Gov. Beshear said. "We want all of our families working, and we know small businesses are incubators for new jobs in our state. The small business credit initiative gives these small businesses an easier path to create those new positions. Economic development officials and business leaders deserve credit for working closely to establish the overall program."
The increased access to capital stems from the state's successful application for $15,487,998 in federal funds from the U.S. Department of Treasury through the State Small Business Credit Initiative (SSBCI). The funds, which will be leveraged 10-1 with private lender funds to generate almost $155 million, are part of the Small Business Jobs Act of 2010 passed in September 2010.
Under the Small Business Jobs Act, Kentucky can access $15.5 million in SSBCI funds. Kentucky 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 $15.5 million allocation for Kentucky is expected to support nearly $155 million in new private lending to small businesses in that state.
Economic Development Cabinet Secretary Larry Hayes filed the application on behalf of the Commonwealth. In planning the program, cabinet staff consulted with private lenders of all sizes, public-policy makers, Kentucky small business organizations, U.S. Department of Treasury officials and other states' economic development officials.
"Based on our research of other states' existing credit support programs and Kentucky's small business programs, we anticipate these new programs will offer the broadest solution to the current credit issues facing Kentucky small business owners and entrepreneurs," Hayes said.
The Kentucky Economic Development Finance Authority (KEDFA), a board established within the cabinet, has been designated to accept the $15.5 in funds and administer the new credit support programs.
"As one of the largest Kentucky-based community banks and a leading lender to small businesses, we are confident that the SSBCI programs will provide much needed capital to ensure continued growth opportunities for home grown businesses that play such an important role in communities throughout the Commonwealth," said Steve Trager, chairman and CEO of Republic Bank.
"Kentucky Highlands Investment Corporation has worked closely with the cabinet for economic development on numerous projects to help attract, start and expand businesses," said Jerry Rickett, president and CEO of Kentucky Highlands Investment Corporation. "These three credit enhancement programs developed within the Kentucky Small Business Credit Initiative are sure to improve many entrepreneurs' ability to access funding, grow their operations and hire workers. We fully support the Kentucky SSBCI programs and applaud the governor and the cabinet for economic development for their hard work in applying for these funds."
"The Kentucky Small Business Development Center works side by side with entrepreneurs across our Commonwealth and understands the challenges that they are having when it comes to acquiring the funding necessary to grow operations and hire workers," said Becky Naugle, state director of the Kentucky Small Business Development Center. "With that in mind, we look forward to working closely with the cabinet for economic development and are very pleased to support the new credit enhancement programs developed within its Kentucky Small Business Credit Initiative."
"These funds will provide a powerful spark for investment, growth, and job creation in Kentucky," Treasurer Rios said. "This initiative will help ensure that more Main Street small businesses have access to the loans they need to expand, invest, and hire in their local communities."
Program Part of Continued Effort to Support Small Businesses
The initiative is the latest of several recent small business programs implemented by Gov. Beshear's administration. In January 2011, KEDFA began accepting applications through the Kentucky Small Business Investment Tax Credit program, part of the Governor's 2009 INK legislation. Additionally, the Governor's Kentucky Export Initiative, launched in late 2010, is helping to increase exporting activity among Kentucky small and medium-sized businesses. Gov. Beshear also recently launched Kentucky's first Minority and Women Business Enterprise Certification Program, as well as unveiled a specialty license plate promoting Kentucky small business.
The One-Stop Business Portal is also in development, which will provide small businesses with one resource for starting and running a business in the Commonwealth. In order to make all of these programs effective, the governor has tasked the cabinet to partner with private and public sector small business assistance agencies across the Commonwealth to assure a consistent and comprehensive network that will meet small business needs.
"We must continue to look for ways to encourage the growth and stability of small business," said Sen. Alice Forgy Kerr, of Lexington. "I know small businesses are the lifeblood of Kentucky. By strengthening them, we can keep jobs in Kentucky and recruit more jobs to our state."
"Gov. Beshear is working hard to guide Kentucky through these tough economic times," said Rep. Ruth Ann Palumbo, of Lexington. "These monies will provide millions of dollars for small businesses to create new jobs in our Commonwealth."
"As a longtime advocate for small business, I can see this initiative helping to create jobs all over Kentucky," said Rep. Tanya Pullin, of South Shore. "This announcement could not come at a better time for small business. I want to thank U.S. Treasurer Rosie Rios, Gov. Beshear and the Kentucky Cabinet for Economic Development for their attention to small businesses. Today's announcement will long be remembered as a high point for small business job creation."
For further information about the State Small Business Credit Initiative, visit http://www.ustreas.gov/offices/domestic-finance/ssbci/.
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