Gov. Steve Beshear Monday announced a major small business initiative that will provide Kentucky’s small businesses with access to nearly $155 million in new loans to help with job creation across the state. The Kentucky Small Business Credit Initiative involves three new small business programs implemented by the Kentucky Cabinet for Economic Development to facilitate increased private lending to Kentucky’s small businesses. The programs include: the Kentucky Capital Access Program; the Kentucky Collateral Support Program and the Kentucky Loan Participation Program.
Beshear announced the initiative at the Coldstream Center, part of the University of Kentucky’s Coldstream Research Campus, in Lexington with lawmakers, business leaders and United States Treasurer Rosie Rios. The Coldstream Center houses 25 small businesses with more than 300 employees. Several of these businesses are recipients of federal small business grants.
“We want all of our families working, and we know small businesses are incubators for new jobs in our state," Beshear said. "The small business credit initiative gives these small businesses an easier path to create those new positions. Economic development officials and business leaders deserve credit for working closely to establish the overall program.”
The increased access to capital stems from the state’s successful application for nearly $15.5 million in federal funds from the U.S. Department of Treasury through the State Small Business Credit Initiative. The funds, which will be leveraged 10-1 with private lender funds to generate almost $155 million, are part of the Small Business Jobs Act of 2010 passed in September 2010.
Under the Small Business Jobs Act, Kentucky can access $15.5 million in SSBCI funds. Kentucky expects to generate a minimum “bang for the buck” of at least $10 in new private lending for every $1 in federal funding. As such, this $15.5 million allocation for Kentucky is expected to support nearly $155 million in new private lending to small businesses in that state.
Economic Development Cabinet Secretary Larry Hayes filed the application on behalf of the Commonwealth. In planning the program, cabinet staff consulted with private lenders of all sizes, public-policy makers, Kentucky small business organizations, U.S. Department of Treasury officials and other states’ economic development officials.
The Kentucky Economic Development Finance Authority (KEDFA), a board established within the cabinet, has been designated to accept the $15.5 in funds and administer the new credit support programs.