U.S. Sen. Mark R. Warner (D-Va.) announced that the U.S. Department of the Treasury has approved Virginia’s application for up to $18 million in additional federal loan support to the Virginia Small Business Financing Authority. Virginia officials expect this additional federal support to leverage up to $288 million in new small business financing, and state officials have indicated it could help to create or retain nearly 43,000 jobs among Virginia’s small businesses.
This additional loan support for small businesses was first proposed by Senator Warner more than one year ago. Importantly, Sen. Warner’s small business package is completely funded through existing Treasury funds, and it does not add one dime to the federal budget deficit. His proposal eventually was successfully incorporated into the Small Business Jobs Act, which was approved by Congress and signed by the President at the end of 2010.
About $3 million will support Virginia’s successful Capital Access Program, and the remaining $15 million in additional funding will provide “gap financing” for qualified small businesses participating in Virginia’s Economic Development Loan Fund. This program is targeted for those small businesses that may not otherwise qualify for loans under conventional bank underwriting criteria. They typically have a solid track record in business, but have struggled the last few years with decreased cash flow, collateral and lower assessed property values.
“I’ve been working on this issue for more than a year now, and I’m happy to report that the Treasury Department has finally approved Virginia’s application for an enhanced small business lending program,” Warner said. “Everywhere I go, I continue to hear from Virginia small business owners who are frustrated about the lack of available credit. Our small businesses create two out of every three new jobs in this country, but it’s been difficult for small business owners to take out the loans they need to open up shop. Existing small businesses have found it hard to finance inventories, make payrolls, or expand even when business is good.”
“This initiative by Senator Warner is a tremendous example of good government at work,” says Virginia Retail Alliance President & CEO Raymond J. Mattes, III. “We made the Senator aware of the problem, he met with our members, did his due diligence and took decisive action.”
“These funds will provide critical support to state-level programs that help expand small-business lending and spur private sector job growth,” said U.S. Deputy Secretary of the Treasury Neal S. Wolin. “Unlocking credit for small businesses will provide a powerful boost for investment and job creation in local communities across the country.”
For more information about Virginia’s small business programs, please visit the Virginia Department of Business Assistance. For information on the U.S. Treasury Department’s programs for small business financing, refer to the State Small Business Credit Initiative.
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