BANGOR, Maine — The U.S. Department of the Treasury and Gov. Paul LePage Friday announced approval of Maine’s application for funds under the State Small Business Credit Initiative. The state’s planned use of the SSBCI funds to support a variety of business funding programs will help create new private-sector jobs and spur more than $132 million in additional small-businesses lending in the state.
The SSBCI program, which supports state-level, small-business lending programs, is an important component of the Small Business Jobs Act, which was signed into law last fall.
Under the Small Business Jobs Act, Maine can access $13.2 million in SSBCI funds, and the state expects to leverage at least $10 in new private lending for every $1 in federal funding. The $13.2 million allocation for Maine is expected to support more than $132 million in new private lending in the state.
“Maine job creators need access to credit and capital in order to create jobs and hire new employees,” Gov. LePage said in a press release. “Maine’s economic recovery is driven by small businesses and their vision for growth. In partnership with the Maine Department of Economic and Community Development and the Finance Authority of Maine, small-business owners will now have more resources for that growth.”
The Maine Department of Economic and Community Development, in conjunction with the Finance Authority of Maine, will use the funds to support the Economic Recovery Loan Program, the Regional Economic Development Revolving Loan Program and the Small Enterprise Growth Fund.
Maine’s Economic Fund Recovery Loan Program provides direct loans of up to $1 million for businesses with insufficient access to credit in order to remain viable and improve productivity. The Regional Economic Development Revolving Loan Program provides loans to Maine’s regional economic development agencies for the purpose of creating or retaining jobs. The Small Enterprise Growth Fund is a state-run venture capital fund that invests in Maine companies that demonstrate a potential for high growth and public benefit.
Bill Norbert, the Governmental Affairs and Communications Manager for FAME, believes that family-operated businesses throughout the state will benefit from the funds.
“As you know, the Maine economy is driven by small businesses,” he said.
Norbert added that the funds will be a huge factor in helping these businesses to not only keep their doors open, but hire employees.
According to Norbert, the SSBCI funds will be used to recapitalize the following programs: $3 million will be allocated to the Small Enterprise Growth Fund, the state’s venture capital fund; $7 million will be available to a group of 14 regional economic development agencies to make loans to businesses in their areas and $3.1 million will be allocated to FAME for the Economic Loan Recovery Program.
Under SSBCI, all states are offered the opportunity to apply for federal funds for state-run programs that partner with private lenders to increase the amount of credit available to small businesses.
States must demonstrate a reasonable expectation that a minimum of $10 in new private lending will result from every $1 in federal funding. 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.