WASHINGTON ( TheStreet) -- Connecticut, Missouri and Vermont are the latest states getting federal funds for small-business lending initiatives.
Under the U.S. Department of Treasury's State Small Business Credit Initiative, the states are expected to add $534 million in lending to small businesses and job creation. Connecticut is getting $133 million; Missouri is due $269 million; and Vermont will see $132 million.
|With Connecticut, Missouri and Vermont, six states are getting funds so far under the Treasury Department's State Small Business Credit Initiative.|
The program, which supports state-level small-business lending programs, is a component of the Small Business Jobs Act signed by President Barack Obama in September. The applications were approved in conjunction with Tuesday's conference hosted by the Treasury, "Access to Capital: Fostering Growth and Innovation for Small Companies."
States partnering with private lenders can apply for the federal funds."These critical funds will help small businesses access the capital they need to expand their operations, create new jobs and continue supporting our nation's economic recovery," Treasury Secretary Tim Geithner said in a statement. "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 these states." Funding for California, Michigan and North Carolina were already approved. The Treasury said additional applications are expected to be approved in the coming weeks.
States must demonstrate that "a reasonable expectation that a minimum of $10 in new private lending will result from every $1 in federal funding," the Treasury said. Approximately $1.5 billion has been allotted for the program and is "expected to result in at least $15 billion in additional private lending nationwide." Connecticut's approved funding will support its 19-year-old Capital Access Program, which provides loan portfolio insurance to encourage private financial institutions to lend to creditworthy small businesses, according to the release. The program has provided portfolio insurance for about 630 enrolled loans, totaling more than $53.4 million and resulting in the creation of or saving of 6,120 jobs.