The Small Business Jobs Act provides $30 billion in capital to community banks to help them boost lending to creditworthy small businesses looking to hire and expand their operations, Hinojosa said. It also includes $12 billion in small business tax breaks and expands Small Business Administration loan programs.
The “State Small Business Credit Initiative” program provides funding to participating state Capital Access and other state small business lending programs, such as loan participation programs, loan guarantee programs, and collateral support programs.
Hinojosa said it is part of the ongoing effort by Congress and the Obama administration to put Americans back to work and strengthen the economy. It will create 500,000 new jobs, he said, adding the initiative is needed to enhance small business’ access to capital, which, in turn, is necessary to enable those businesses to create and retain jobs and assist in the economic recover.
The money is intended “for programs that partner with private lenders to extend greater credit to small businesses,” the Treasury Department said in a statement. “States are required to demonstrate a minimum ‘bang for the buck’ of $10 in new private lending for every $1 in federal funding. Accordingly, the $1.5 billion funding commitment that the federal government will make for this program is expected to support $15 billion in additional private lending.”
In Texas’ case, that would mean $465,538,790 in new small business lending.
“Small businesses are the engine of our economy, creating two-thirds of the new jobs over the last 15 years. America’s 27 million small businesses continue to face a lack of credit and tight lending standards, with the number of small businesses loans down nearly 5 million since the financial crisis in 2008 under President Bush,” Hinojosa said.
“The State Small Business Credit Initiative program is needed to provide vital support to successful state-level programs that help local entrepreneurs obtain the credit they need to put more Americans back to work,” he concluded.