Today, Mayor Muriel Bowser announced that the District of Columbia has secured an additional $4.2 million from the US Treasury State Small Business Credit Initiative (SSBCI) to help finance three programs created by the District of Columbia that support small and local businesses.
Under SSBCI, the District uses federal funds to facilitate private lending to local small businesses that are creditworthy, but are not getting the loans they need to expand or create jobs. To date, the District SSBCI program, administered by the DC Department of Insurance, Securities and Banking (DISB), has used $4 million in federal funds to leverage $11 million in private lending to District small businesses. The program is estimated to have created one new job for every $55,000 in program funds deployed.
“This additional funding is great news for District entrepreneurs who have struggled with accessing capital to get started or expand their business,” said Mayor Bowser. “By leveraging both public and private funding through innovative finance programs, we are supporting District small business, creating jobs and expanding pathways to the middle class for District residents.”
“The State Small Business Credit Initiative continues to help connect public and private sources of capital to the small businesses that need loans and investments, and the funds will further contribute to jobs and small business growth in the District of Columbia,” said Jeffrey Stout, Director of the State Small Business Credit Initiative at the US Treasury Department. “The program has allowed businesses to move to new facilities, hire and keep workers, and purchase the equipment they need to serve clients and customers.”
The $4.2 million announced today is the second disbursement of SSBCI funds for the District. The additional funds will continue the District’s Collateral Support Program and create two new programs to assist local small businesses: the District of Columbia Loan Participation and Innovation Finance Programs.
The Loan Participation Program will increase lending by targeting companies with temporary cash flow concerns and allow the District to purchase portions of loans made to DC small businesses. Through the Innovation Finance Program, the District will co-invest with private investors in start-ups and emerging companies that seek financing alternatives to traditional commercial financing.
“We recognized that lack of collateral is not the only roadblock to accessing capital for District small businesses. Many face short-term cash flow problems or need equity investments. These additional funds allow us to launch new programs that address those needs,” said Chester A. McPherson, acting commissioner of DISB.
After years of running a business online, Yael Krigman, who received a loan from Revere Bank (one of 14 local participating lenders) supported with 50 percent collateral from this program, is celebrating the grand opening of her business Baked by Yael tonight, in Woodley Park.
“For years, while I worked full-time, I sought out capital options to realize my dream of opening the first cakepoppery in the District. My business would not have been possible without this program,” said Krigman.
SSBCI was created when President Obama signed into law the Small Business Jobs Act on September 27, 2010. Under the program, the Treasury Department will award up to $1.5 billion to fund state and local programs across the country that support small businesses including small manufacturers.
For more on the DC programs, follow this link at disb.dc.gov/smallbusinfo on DISB’s website. For more information on SSBCI and the US Treasury Department’s other small business programs, please visit www.treasury.gov/smallbusiness.