The US Department of Treasury has approved an application for the grant of $18 million in federal loan support for the Virginia based Small Business Financing Authority. The money has been authorized a year ago. This is part of the larger federal program so as to encourage banks to start lending to businesses once again.
Sen. Mark Warner worked to make the funding available last year. Warner feels that the fund is meant to mitigate the risks that banks are confronted with. Warner’s intentions were to make use of existing small business loan programs instead of creating a completely new one.
But small business lending is still in a depreciated state. Small business owners are still yelling that they cannot find credit from banks. Credit is vital for their sustenance. Small businesses are found to generate two out of every three jobs.
Most of the ‘$15 million’ fund will be utilized for ‘gap financing’ for small businesses. The idea is to make loans available to businesses that have a good track record but due to the ongoing recession might have struggled and hence do not qualify for conventional bank loans. The other $3 million goes as Virginia’s Capital Access Program.
Warner says that state officials have strong convictions that they can use the $18 million to help leverage $288 million in small business loans. This would create 43,000 new jobs.
This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to email@example.com