Puerto Rico to get $109M in federal funds for small business growth
U.S. Deputy Secretary of Commerce and Puerto Rico Economic Growth Coordinator Don Graves announced a $109 million allocation from the US Department of Treasury to benefit the island’s small and mid-sized businesses through loans to be granted by the Puerto Rico Economic Development Bank (BDE, in Spanish).
The first $30 million of the allocation — which will come from the State Small Business Credit Initiative under the American Rescue Plan — should be arriving in the next two weeks, he said during a news conference at the State Department’s headquarters in Old San Juan.
“I thank our federal partners at the Treasury Department for this necessary investment that will help the backbone of the Puerto Rican economy: the small businesses and entrepreneurs. This opportunity helps ensure that all businesses in all corners of the archipelago, especially small and disadvantaged ones, can participate and benefit,” Graves said.
The funding will go toward operating two programs: a collateral support program and a loan participation program. The loan participation program, with an allocation of $21.8 million, for commercial loans and loans directed at specific strategic sectors for economic development.
The collateral support program, with $87.4 million allocated, provides collateral guarantees to lenders, while the structure of the program allows for broader participation by financial institutions operating in Puerto Rico.
Both programs will focus on low- to moderate-income communities and other underserved communities across Puerto Rico, Vieques and Culebra, Graves said.
“This allocation of federal funds validates the excellent performance of our employees in favor of our small and medium businesses. I’m sure that we will have the same success that we achieved with federal grants under the CDBG-DR SBF program, through which we have already disbursed more than $139 million to businesses affected by Hurricanes Irma and María,” said said BDE President Luis Alemañy, who added that this project continues to guarantee the sustainability of the public financial institution.
“We will now have the responsibility of administering both programs, which will benefit thousands of businesses, including those in low- and moderate-income communities. In addition, it will ensure that our small and medium businesses can expand their services,” he said.
According to estimates made by the BDE’s Center for Economic Studies, these funds are expected to matched by private banks and create at least a one-to-one leverage or a maximum of 10, in a 10-year period, which results in $1 billion in funds flowing through the economy.
The agency predicted that if that materializes, 48,967 direct, indirect and induced jobs can be created, approximately, and have an additional income and production impact of $680.3 million in the island’s economy.
Officials urge filling out Census
During the press conference, both Graves and Secretary of State Omar Marrero stressed the importance of filling out the ’22 Economic Census, which seeks to provide statistical information on the economy and industries in Puerto Rico, at a level of detail comparable to what is carried out in the 50 US states.
“We urge all companies and businesses in Puerto Rico to participate in this Census, which will help provide a detailed and exhaustive framework of our economic activity. In turn, the statistics obtained through this census will serve as a basis for informing future economic development and sound administration policies,” Marrero explained about the Census, which is carried out every five years.
The last time the Census was carried out in 2017 — right after Hurricane María struck — so government officials expect a shift in the industries that will take on more importance this time around.
Department of Economic Development and Commerce (DDEC, in Spanish) Secretary Manuel Cidre mentioned areas such as supply chain, businesses related to food security to substitute imports, information technology and tourism as those expected to take on significant relevance in coming years.
Meanwhile, Alemañy said since the last Census was taken, some 3,500 new businesses have been established, of which roughly 95% are small and mid-sized businesses.
The data provided by each industry in the census is divided into basic statistics — including the number of establishments, sales or income figures, payrolls, and jobs created — and industry-specific statistics, such as information on inventories and capital expenditures, among others. other lines.
Graves has been in Puerto Rico since Monday, meeting with local government officials and members of the private sector including the first roundtable hosted by the Center for a New Economy to discuss working capital needed by small and mid-sized businesses in Puerto Rico to unlock federal funding. Specifically, the group addressed what tools or resources can the federal government extend and how to make economic growth more robust and longer lasting with federal dollars.
On Tuesday, Graves tourded Lufthansa’s Technical Training GmbH (LTT), the provider of training and qualification programs for the aviation industry, and participated in a roundtable at the Aeronautical & Aerospace Institute of Puerto Rico (AAIPR) and addressed the current Aerospace landscape and the top needs to grow this sector in Puerto Rico.
On Wednesday, he took part in a roundtable discussion at the Puerto Rico Manufacturers Association on how the federal government can help in terms of working capital, workforce training and retooling, and additional labor so that Puerto Rico’s manufacturing base can better access the billions in federal funding that have been made available for Puerto Rico’s recovery and renewal.
