State Gets $55.6M in Federal Funding to Spur Small Business LendingThursday, January 16, 2014
The U.S. Department of Treasury provided $55.6 million to the California Office of Business and Economic Development and the state Treasurer’s Office aimed at spurring lending to small businesses.
The funding will be dispersed to two programs, the California Small Business Loan Guarantee Program, and the California Capital Access Program, according to the state Treasurer’s Office.
“These funds will launch a new wave of lending that will help small businesses thrive, expand and create jobs,” said State Treasurer Bill Lockyer. “Microloans have been especially successful in helping businesses in low and moderate income communities.”
In San Diego, California Southern Small Business Development Corp. in Liberty Station is one of 11 state offices that work with private lenders to provide small business loans, primarily ranging from about $50,000 to $1.5 million although the maximum loan limit is much higher.
CDCs such as California Southern provide guarantees on riskier loans that traditional banks and credit unions are unwilling to make because the borrowers don’t meet the lenders’ requirements.
The latest federal funding comes as part of the Small Business Jobs Act of 2010, which contained $1.5 billion for state small business lending programs. The Treasury Department awarded allocations in all 50 states by early 2012. Then each state designed its own specific small business lending programs in response to local economic conditions and capacity, according to an announcement from the U.S. Treasury.