By M. Scott Carter
Courtesy of The Journal Record
OKLAHOMA CITY ? A program that makes federal money available to small businesses seeking bank loans has about $13 million available for Oklahomans ? but it?s not that popular with at least one member of the state?s congressional delegation.
Known as the 2011 Small Business Jobs Act, the program provides federal funds to cover the difference between what a company has collateral for and what the bank says it needs. Under the program?s rules, as long as the business pays the loan, the cash stays with the government.
U.S. Deputy Treasury Secretary Neal Wolin said the initiative is expected to help spur up to $15 billion in lending to small businesses. In a media statement, treasury officials said the plan would help expand credit to the country?s small businesses.
?These funds will provide critical support to state-level programs that help expand small-business lending and spur private sector job growth,? Wolin said. ?Unlocking credit for small businesses will provide a powerful boost for investment and job creation in local communities across the country.?
Eleven states were the first to receive the grants. However, all states are offered the opportunity to apply for funds for state-run programs that partner with private lenders and investors to increase the amount of credit available to small businesses.
Wolin said a state must demonstrate a reasonable expectation that every $1 in federal funding will generate a minimum of $10 in new private lending. Accordingly, the overall $1.5 billion federal funding commitment for this program is expected to result in at least $15 billion in additional private lending nationwide.
But not everyone likes the program.
Republican U.S. Rep. Tom Cole said he voted against the program.
?I would prefer private capital to be invested in business and industry,? he said.
Cole said eliminating regulations on businesses is a better way to spur economic growth.
?I think there are better ways of encouraging private sector growth,? he said.
Donald Hackler, deputy general counsel with the Oklahoma Department of Commerce, said state programs vary across the country. Hackler said Oklahoma?s program funnels about $13 million in federal funds to state venture capital initiatives.
?It?s designed to spur capital investment in smaller businesses that have a potential for growth,? he said.
Hackler said Oklahoma?s program is administered by i2E Inc., a private not-for-profit corporation that works to provide venture capital for growing high-growth companies in Oklahoma.
Hackler said the state has used about $3 million of its $13 million federal grant. Those funds, he said, have been earmarked for three venture capital funds.
Under the State Small Business Credit Initiative, participating states can use the 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.
The State Small Business Credit Initiative will allow states to build on successful models for state small business programs, including collateral support programs, Capital Access Programs and loan guarantee programs. Existing and new state programs are eligible for support under the State Small Business Credit Initiative.
Click here to read the article at the Journal Record website.
Source: http://www.i2e.org/news/program-has-13m-to-boost-small-business/
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