By David Runk
Associated Press
DETROIT (AP) -- Michigan and North Carolina are the first states to get a share of funding from a new $1.5 billion federal program aimed at helping creditworthy small businesses and manufacturers get loans they need to expand as banks tighten up lending standards, officials announced last Friday.
State Small Business Credit Initiative funds are expected to be used by states to help businesses secure 10 times as much in loans from private lenders, meaning the program could encourage $15 billion in loans nationwide, the Treasury Department said. Michigan will get $79.1 million and North Carolina will get $46.1 million.
"When small businesses can't access credit, they cannot create jobs," U.S. Treasurer Rosie Rios said in announcing the funding at a Detroit metal stamping facility.
Funding for other states is expected to be announced later. The goal is to encourage job growth.
The federal program is partly modeled on a Michigan program that used $20 million to help secure $191 million in loans for businesses. Rios was joined by Republican Michigan Gov. Rick Snyder, U.S. Sen. Debbie Stabenow, D-Mich., and U.S. Rep. Gary Peters, D-Mich., for the announcement at United Metal Products, which earlier got a loan with help from the state program.
"This is a great example of the entrepreneurial effort we have going here in the state, the dynamic attitude that we're taking," said Snyder, who took office this month.
Michigan has lost jobs every year for the past decade, and was the only state to lose population during that period. It's had one of the nation's highest unemployment rates at 12.4 percent in November. That month, North Carolina's unemployment rate rose to 9.7 percent as the state led the country in the number of jobs lost.
"Expanding access to credit for small businesses is critical for speeding North Carolina's economic recovery," North Carolina Gov. Beverly Perdue, a Democrat, said in a statement.
Peters and Stabenow helped craft the State Small Business Credit Initiative. The program allows states, the District of Columbia and U.S. territories to apply for federal funds to help support lending. They are required to demonstrate at least $10 in new private lending for every $1 in federal funding.
The loan program is part of the Small Business Jobs Act that was signed in September by President Barack Obama.
Published: Tue, Jan 18, 2011
