The U.S. Treasury Department announced Wednesday the transfer of more than $4.9 million in State Small Business Credit Initiative (SSBCI) funds to Puerto Rico to help local businesses access the capital they need to grow and hire.
The Economic Development Bank will use the funds to leverage greater levels of private lending to small businesses. Including this third and final disbursement of SSBCI funds, the U.S. Treasury Department has disbursed a little more than $14.5 to Puerto Rico to support small businesses and the local economy under the SSBCI program.
The funds are being used under a loan program in partnership with private banks ($12.5 million) and a venture capital investment program ($2 million).
“As the Commonwealth continues to work toward fiscal renewal and economic growth, the Obama Administration wants to make sure Puerto Rico receives every federal dollar to which it is entitled,” said Matthew Rutherford, acting under secretary for Domestic Finance at the U.S. Treasury Department.
“With this funding from the U.S. Treasury’s State Small Business Credit Initiative, small businesses and entrepreneurs in Puerto Rico will have access to the capital they need to create jobs and expand their businesses,” he said.
SSBCI requires that for every $1 of SSBCI funds, $10 in private investment must be achieved over the term of the program, which expires in 2017.
“At a time when our economy needs the creation of new small and medium enterprises, which in turn create jobs on the island, this type of program gives us more tools to support local business and promote Puerto Rico’s economic development of,” said Joey Cancel Planas, EDB president.
Through SSBCI, the U.S. Treasury Department will award up to $1.5 billion to fund programs across the country that support small businesses including small manufacturers.
To date, more than $1 billion has been disbursed to states, municipalities, and U.S. territories. SSBCI funds are not repaid to the federal government; they remain with participants to be redeployed to support even more small business development locally. To date, participants have reported recycling more than $14.7 million, which is expected to grow as the program continues. Additionally, the program is designed to help spur new private sector lending or investment in small companies by leveraging private capital along with the federal support offered by the program.
SSBCI was created when President Obama signed into law the Small Business Jobs Act of 2010 on September 27, 2010. To build on the momentum of the program’s success and capitalize on new working relationships among states and small business lenders and investors, President Obama proposed an extension of SSBCI in his 2015 Budget with an additional $1.5 billion in funding.