Maryland Economic Development Chief Testifies in Support of Federal Small Business Lending Bill

BALTIMORE, May 18 /PRNewswire-USNewswire/ -- Maryland Department of Business and Economic Development Secretary Christian S. Johansson will join Gene Sperling from the U.S. Department of Treasury and others before the House Full Committee on Financial Services today in support of proposed federal legislation that seeks to unlock credit for small businesses through state-run loan guarantee programs. Under the proposed State Small Business Credit Initiative Act of 2010 (HR 5302), which President Barack Obama sent to Congress for consideration late last week, participating states and jurisdictions will receive a portion of federal funds to capitalize their loan guarantee programs, which currently exist in 34 states and U.S. territories. Maryland Governor Martin O'Malley and Secretary Johansson were instrumental in crafting the federal legislation, which is based in part on Maryland's Industrial Development Financing Authority (MIDFA), the successful program which provides a state-funded guarantee of privately-financed small business loans.

"Expanding the capacity of existing State and U.S. territory small business loan guarantee programs offers a shovel ready solution to restore the flow of credit to our small businesses that have been crippled by tougher lending standards and devalued collateral," said Governor O'Malley. "We urge Congress to move on this legislation quickly so that our nation's small businesses can access the capital they need to grow and create much-needed jobs."

Maryland has played a key role in moving the State Small Business Credit Initiative Act of 2010 forward. At a National Governor's Association meeting in February, Governor O'Malley rallied the bi-partisan support of 28 Governors to put forth a request to President Obama to help close the credit gap for small businesses. Governor O'Malley based his proposal on Maryland's Small Business Credit Recovery Program, which was launched in 2009 to connect small businesses with lenders. Working with a number of local banks, including The Harbor Bank of Maryland, M & T Bank and others, the program has been able to provide $5 million in loan guarantees for a number of Maryland's small businesses, part of a total $40 million in loans that MIDFA has guaranteed in FY 2010.

“I am proud that we have been able to help so many small businesses in Maryland, and build on that success by taking this Main Street approach to the national level,” said Secretary Johansson. “I look forward to continuing to grow this program in Maryland, where we currently have upwards of $150 million in loans to guarantee in our pipeline.”

"The Maryland Small Business Credit Recovery Program is an excellent vehicle to assist small businesses seeking access to capital," said Darius L. Davis, EVP/Chief Operating Officer of The Harbor Bank of Maryland. "The state guarantee provides an additional source of support that has incented The Harbor Bank to increase lending to small businesses during these challenging economic times.  We are looking to utilize the guarantee whenever possible."

The hearing will be broadcast on CSPAN at 1 p.m. (EDT). Learn more about the State Small Business Credit Initiative Act of 2010 (HR 5302) at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h5302ih.txt.pdf

The Maryland Department of Business and Economic Development stimulates private investment and creates jobs by attracting new businesses, encouraging the expansion and retention of existing companies, and providing workforce training and financial assistance to Maryland companies. The Department promotes the State's many economic advantages and markets local products and services at home and abroad to spur economic development and international investment, trade and tourism. For more information, visit www.choosemaryland.org.

SOURCE Maryland Department of Business and Economic Development