Federal Small Business Funding Starts Being Used In Michigan and North Carolina
Jan 17th, 2011 @ 10:54 AM by Debbie Dragon
The states of North Carolina and Michigan are the first to start getting money to lend to small businesses. The funds are coming from a new federal program that is part of the Small Business Jobs Act. The Act was signed into law by President Obama last September. The federal program plans to dish out 1.5 billion to help small businesses across the country who are deemed credit worthy, receive loans. Loans have been difficult to come by for these businesses during a time when banks have been tightening underwriting loan standards.
While the federal government is putting in just $1.5 billion, the program has the goal of helping to fund an estimated $15 billion to small businesses, nationwide. The funds are meant as an incentive to help encourage lending and should secure ten times the stimulus amount. North Carolina will be receiving $46.1 million to help boost lending where Michigan will receive even more, $79.1 million. Other states are still waiting to find out how much they will be receiving.
A similar program in Michigan helped to shape this federal program. Michigan’s program used a sum of $20 million which was used to secure a total of $191 million in business loans.
The overall goal of the program is to help increase jobs. “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.
Both the states of Michigan and North Carolina have been hit with high unemployment rates. Over the last decade, Michigan has seen a steady pace when it comes to job losses. The state’s unemployment is one of the highest in the nation and last November they were at 12.4%. During the same month North Carolina saw a surge in job losses. There unemployment rate during November was up to 9.7%.
“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.
All states and the District of Columbia are allowed to participate in the program. In order to qualify each state is required to show proof that for every dollar received in federal funding, ten dollars is secured for small business lending.
Debbie Dragon is a full time freelance writer and the co-owner of ReliableWriters.com.
i have been trying to get a business loan but i do not have any sucesses i have bad credit but will repay the loan. is there anyone out there that can help me?