The U.S. Department of Treasury and Gov. Nixon jointly announced today the approval ofMissouri’s application for $27 million in funding through the State Small Business Credit Initiative.
Nixon’s office says Missouri’s planned use of the funds will help create new jobs and spur more than $269 million in additional small-business lending in the state. The program supports state-level, small-business lending programs and is part of the Small Business Jobs Act President Obama signed into law last fall.
“Along Main Streets in every corner of Missouri, small businesses are a critical force for creating jobs and growing our economy,” Nixon says. “These new resources will help Missouri entrepreneurs grow their operations and turn their dreams into bricks and mortar. We appreciate the leadership shown by President Obama and Secretary Geithner in providing these resources for our state, and we will invest these tools wisely and strategically in businesses that will transform Missouri’s economy for the 21st Century.”
Treasury Geithner says the funds will help Missouri small businesses access the capital they need to expand their operations, create new jobs, and continue supporting our nation’s economic recovery.
“Public-private lending partnerships, such as the State Small Business Credit Initiative, have a proven track record of success, and I’m pleased that this funding is on its way to support economic growth in Missouri,” Geithner says.
Missouri expects to generate 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, Nixon’s office reports.
Missouri’s plan dedicates $16.9 million of the funding to establish the high-tech Missouri IDEA (Innovation, Development and Entrepreneurial Advancement) Seed and Venture Capital Funds to 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 fewer than 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.”
While in Kansas City, Gov. Nixon toured Willco Technologies in Kansas City. Founded in 2005, Willco Technologies develops software and custom web solutions businesses, government agencies and other organizations. Willco’s current clients include the U.S. Department of Defense, the Jackson County Election Board and the State of Missouri. Earlier in the day, Gov. Nixon toured three start-up companies housed at the high-tech Center for Emerging Technologies in St. Louis. The center is a business incubator that provides facilities, training and access to capital for next-generation medical and advanced-technology companies.
For more information, visit http://www.treasury.gov/resource-center/sb-programs/Pages/ssbci.aspx. Missouri businesses can find more information about the program at www.MO.gov. The application period for Missouri businesses will open April 8, and applications will be available on www.MO.gov as well.
(This information was provided by a press release sent out by the Governor’s Office.)