CARSON CITY – A new federal program is bringing $13.8 million to Nevada to lend to small businesses to spur job growth, Gov. Brian Sandoval announced earlier this week.
The funds provided to Nevada’s State Small Business Credit Initiative (SSBCI) by the Small Business Jobs Act are expected to help create private sector jobs and spur more than $138 million in additional lending to small businesses in Nevada, Sandoval said.
“Access to funding is a significant issue for many entrepreneurs seeking to grow,” Sandoval said. “This funding will go a long ways towards helping new small businesses get off the ground and creating jobs for Nevadans.”
Nevada applied for the funds despite opposition to the program by the state’s Republican representatives in Congress at the time: then-Rep. Dean Heller, R-Nev., now in the Senate, and then-Sen. John Ensign, R-Nev. Political analyst Jon Ralston noted the apparent contradiction in a recent column in the Las Vegas Sun, although he pointed out that then-Rep. Dina Titus, D-Las Vegas, also opposed the measure.
Under the Small Business Jobs Act, Nevada can now access $13.8 million in SSBCI funds. Nevada expects to generate a minimum of $10 in new private lending for every $1 in federal funding.
The Nevada Commission on Economic Development will use the funds to support the Nevada Microenterprise Initiative and a new Nevada Collateral Support Program. The potential job growth impact of the program is 1,035 positions throughout Nevada, with an emphasis on manufacturing, utilities, construction, and health services.
“These funds will help break down barriers to loans for creditworthy small businesses looking to invest and hire in their local communities,” said Treasurer of the United States Rosie Rios. “This program will help ensure that more Main Street entrepreneurs have access to the credit they need to expand their businesses and create new jobs.”
Nevada Commission on Economic Development Director Mike Skaggs said: “These programs will allow the state to participate with financial institutions throughout the state to support additional lending activities for our Nevada small businesses.”
“Anything that helps to support business expansion and ultimately increase employment in our state will be a great benefit,” Heritage Bank of Nevada President Stan Wilmoth said. “The collateral support piece of the funding will allow banks to refinance debt secured by assets with little or no equity at current market rates.”
In conjunction with the Nevada Banker’s Association, the Office of Economic Development will put funds on deposit at Nevada banks on a transaction by transaction basis to enhance the collateral position of borrowers. These will be business loans with a focus on companies which create jobs or retain jobs in our base economic clusters such as technology, mining, manufacturing, logistics, or film and digital media production. Generally, these loans will have a targeted amount of $250,000.
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 overall $1.5 billion federal funding commitment for this program is expected to result in at least $15 billion in additional private lending nationwide.