Governor O'Malley, U.S. Treasurer Rosie Rios Announce $23 Million to Support Maryland Small Businesses
Federal funds expected to leverage $230 million in small business lending
Baltimore, MD (May 25, 2011) – Joined by business leaders and elected officials at the Greater Baltimore Committee’s Annual Meeting tonight, Governor Martin O’Malley will announce that Maryland has received approval for $23 million in federal funding to help Maryland’s small businesses access much-needed capital to expand and create new jobs. These U.S. Treasury funds are expected to leverage $230 million in small business lending in the State. In total, $1.5 billion is being allocated nationwide as part of the State Small Business Credit Initiative (SSBCI), a program of the Small Business Jobs Act that President Obama signed into law in October 2010. The Maryland Industrial Development Financing Authority (MIDFA), which helped businesses access more than $33 million in loans in FY 2010, will administer the use of the funds.
“These federal funds are coming at a time when Maryland small businesses, and small businesses around our country, are continuing to navigate the credit challenges brought by the economic downturn,” said Governor O’Malley. “In Maryland, we have made unlocking credit for small businesses a top priority with the creation of our Small Business Credit Initiative, which provides a state-backed loan guarantee. Since that program was launched in December 2009, we have been able to help small businesses access $8.5 million in loans that otherwise would not have been approved, creating or saving nearly 500 jobs.”
“This funding will help Maryland small businesses access the capital they need to expand their operations, invest in new equipment, and create new jobs,” said Treasurer of the United States Rosie Rios. “The program provides a powerful incentive for new private lending to small businesses, which will help spur additional job creation and economic growth throughout Maryland.”
With $10.5 million being directed to MIDFA, the state’s loan guarantee program, the remainder of the funds will be allocated in various State finance programs. The Maryland Venture Fund – the state’s designated Venture Capital Fund and a focus of Governor O’Malley’s signature InvestMaryland initiative signed into law recently, is projected to generate approximately $13 million in FY 12. The SSBCI will generate an additional $6.5 million – more than four times what the fund currently has available; the Maryland Small Business Financing Authority will receive $4.5 million for their loan guarantee program; and Neighborhood Business Works, a program of the Maryland Department of Housing and Community Development, will receive $1.5 million.
“This is a good example of leveraging strategic federal government funding into private investment and job growth in Maryland,” said Donald C. Fry, President and CEO of the Greater Baltimore Committee. “Business and economic development leaders have told us that state programs such as those to which this funding is allocated are core pillars of a competitive business environment.”
Last year, Governor O’Malley helped pave the way for the establishment of the SSBCI, rallying the bipartisan support of 28 governors at a National Governors Association meeting in February 2010, and putting forth a request to President Obama to help lessen the credit gap for small businesses by funding state loan guarantee programs. The O’Malley-Brown Administration worked with U.S. Secretary Timothy Geithner and his team to craft the legislation, which is based in part on Maryland’s MIDFA loan guarantee program. In addition Governor O’Malley dispatched Department of Business and Economic Development Secretary Christian S. Johansson to testify before the House Finance Services Committee to make the case for the potential of loan guarantee programs like MIDFA and help move the Small Business Jobs Act forward.
In addition to the State Small Business Credit Initiative, the Small Business Jobs Act includes a number of important provisions to support small business job creation. The Act includes eight new small business tax incentives, creates a $30 billion Small Business Lending Fund to help small and community banks provide new loans to small businesses; extends and expands existing Small Business Administration loan programs; and delivers other important benefits for small businesses.