JEFFERSON CITY, Mo. (KMOX) – Word out of Missouri Governor Jay Nixon’s office this morning; the Obama Administration has approved $269 million in new lending to Missouri small businesses to help create jobs.
The U.S. Department of the Treasury and Missouri Gov. Jay Nixon announced that the approval of Missouri’s State Small Business Credit Initiative (SSBCI) application. Missouri’s planned use of the SSBCI funds will help create new jobs and is expected to spur more than $269 million in additional small business lending in that state. The SSBCI program, which supports state-level, small-business lending programs, is an important component of the Small Business Jobs Act that President Obama signed into law last fall.
Under the Small Business Jobs Act, Missouri can access $26.9 million in SSBCI funds. Missouri expects to generate a minimum “bang for the buck” of at least $10 in new private lending for every $1 in federal funding. As such, this $26.9 million allocation for Missouri is expected to support more than $269 million in new private lending in that state.
Missouri’s approved plan dedicates $16.9 million of the state’s SSBCI funding to establish the hi-tech Missouri IDEA Seed and Venture Capital Funds (IDEA Funds). IDEA stands for Innovation, Development and Entrepreneurial Advancement.
The Missouri IDEA Funds promote the formation and growth of businesses that engage in the transfer of science and technology into job creation. The funds provide financing to eligible businesses through four components that correspond to the four stages of venture growth: (1) pre-seed capital stage financing; (2) seed capital stage financing; (3) venture capital stage financing; and (4) expansion stage debt. Collectively, these four components will provide financing opportunities throughout the process entrepreneurs call the “continuum of capital.” In this way, the funds will support new venture formation and growth all the way from research and development to commercialization.
Missouri’s approved plan also dedicates $10 million of SSBCI funding to the Grow Missouri Loan Participation Fund. That program supports the formation and growth of businesses in the industrial, commercial, agricultural, and recreational sectors. It provides loans of up to $3 million to businesses with under 500 employees to help attract new enterprises and expand existing companies.
Under the State Small Business Credit Initiative, 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 $1.5 billion federal funding commitment is expected to result in at least $15 billion in additional private lending nationwide.
Treasury Secretary Tim Geithner announced the approval of Missouri’s SSBCI application during a conference today at the U.S. Treasury Department entitled, “Access to Capital: Fostering Growth and Innovation for Small Companies.” The conference brings together policymakers, entrepreneurs, investors, academics, and other market participants to explore how both the public and private sectors can help promote access to capital at each stage of growth for a small business – from seed capital, to growth equity, to accessing the public markets.
For more information about the SSBCI, Missouri businesses can find more information about the program at http://www.mo.gov/
The application period for Missouri businesses will open April 8, and applications will be available on http://www.mo.gov/ as well.