Federal funds expected to leverage $230 million in small business lending
BALTIMORE, May 25, 2011 /PRNewswire-USNewswire/ -- Joined by business leaders and elected officials at the Greater Baltimore Committee's Annual Meeting, Governor Martin O'Malley tonight announced that Maryland has received approval for $23 million in federal funding to help Maryland's small businesses access much-needed capital to expand and create new jobs. These U.S. Treasury funds are expected to leverage $230 million in small business lending in the State. In total, $1.5 billion is being allocated nationwide as part of the State Small Business Credit Initiative (SSBCI), a program of the Small Business Jobs Act that President Obama signed into law in October 2010. The Maryland Industrial Development Financing Authority (MIDFA) will administer the use of the funds and helped businesses access more than $33 million in loans in FY 2010.
"These federal funds are coming at a time when Maryland small businesses, and small businesses around our country, are continuing to navigate the credit challenges brought by the economic downturn," said Governor O'Malley. "In Maryland, we have made unlocking credit for small businesses a top priority with the creation of our Small Business Credit Initiative, which provides a state-backed loan guarantee. Since that program was launched in December 2009, we have been able to help small businesses access $8.5 million in loans that otherwise would not have been approved and helped create or retain nearly 500 jobs."
"This funding will help Maryland small businesses access the capital they need to expand their operations, invest in new equipment, and create new jobs," said Treasurer of the United States Rosie Rios. "The program provides a powerful incentive for new private lending to small businesses, which will help spur additional job creation and economic growth throughout Maryland."
With $10.5 million being directed to MIDFA, the state's loan guarantee program, the remainder of the funds will be allocated in various State finance programs. The Maryland Venture Fund – the state's designated Venture Capital Fund – has been the subject of much interest and news coverage of late with the signing last week of the InvestMaryland program into law. While InvestMaryland is projected to generate approximately $13 million for the fund in FY 12, the SSBCI will generate an additional $6.5 million– more than four times what the fund currently has available; the Maryland Small Business Financing Authority will receive $4.5 million for their loan guarantee program; and Neighborhood Business Works, a program of the Maryland Department of Housing and Community Development, will receive $1.5 million.
"This is a good example of leveraging strategic federal government funding into private investment and job growth in Maryland," said Donald C. Fry, President and CEO of the Greater Baltimore Committee. "Business and economic development leaders have told us that state programs such as those to which this funding is allocated are core pillars of a competitive business environment."
Last year, Governor O'Malley helped pave the way for the establishment of the SSBCI, rallying the bipartisan support of 28 governors at a National Governors Association meeting in February 2010, and putting forth a request to President Obama to help lessen the credit gap for small businesses by funding state loan guarantee programs. The O'Malley-Brown Administration worked with U.S. Secretary Timothy Geithner and his team to craft the legislation, which is based, in part, on Maryland's MIDFA loan guarantee program. In addition, at Governor O'Malley's request, Department of Business and Economic Development Secretary Christian S. Johansson testified before the House Finance Services Committee to make the case for the potential of loan guarantee programs like MIDFA and helped move the Small Business Jobs Act forward.
In addition to the State Small Business Credit Initiative, the Small Business Jobs Act includes a number of important provisions to support small business job creation. The Act includes eight new small business tax incentives, creates a $30 billion Small Business Lending Fund to help small and community banks provide new loans to small businesses; extends and expands existing Small Business Administration loan programs; and delivers other important benefits for small businesses.
The Maryland Department of Business and Economic Development's mission is to attract new businesses, stimulate private investment and create jobs, encourage the expansion and retention of existing companies and provide businesses in Maryland with workforce training and financial assistance. The department promotes the State's many economic advantages and markets local products and services at home and abroad to spur economic development, international trade and tourism. As a major economic generator, the department also supports the arts, film production, sports and other special events. For more information, visit www.choosemaryland.org.
SOURCE Maryland Department of Business and Economic Development