U.S. Department of the Treasury, Idaho Housing and Finance Association $13.2 Million Awarded to Idaho to Spur Lending to Small Businesses

BOISE, ID – August 19, 2011 – (RealEstateRama) — Idaho Housing and Finance Association (IHFA) announced today the approval of Idaho’s State Small Business Credit Initiative (SSBCI) application by the U.S. Department of the Treasury. The SSBCI program, which supports state-level, small-business lending programs, is an important component of the Small Business Jobs Act signed into law last fall.

Under the Small Business Jobs Act, Idaho can access $13.2 million in SSBCI funds. Idaho 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 $13.2 million allocation for Idaho is expected to support more than $132 million in new private lending in the state.

“These funds will provide critical support to state-level programs that help expand small-business lending and spur private sector job growth,” said Deputy Secretary of the Treasury Neal S. Wolin. “Unlocking credit for small businesses will provide a powerful boost for investment and job creation in local communities across the country.”

The federal funds will be received by the Idaho Department of Commerce and administered by IHFA.

“The SSBCI funds are going to make a great impact in Idaho’s economy,” said Gerald Hunter, IHFA president and executive director. “Banks are already partnering with Idaho businesses to provide financing. The collateral funding will give them the extra assurance they need to make loans to small businesses that qualify but whose asset values might have dropped because of market conditions. These funds will help small business in Idaho grow, create employment and revitalize communities.”

This program will help Idaho small businesses receive additional collateral funding in the form of cash deposits that will be administered by IHFA but made available through Idaho banking institutions. The funds would be pledged to the lenders by IHFA and the small business as security for the qualified loan. When the loan is paid back, the savings would come back to IHFA and would be reinvested in new small business loans. If the borrower were to default, the pledged funds would be used by the lender to cover losses.

The loans can be used to cover a wide variety of purposes, such as start up costs, working capital, business acquisitions and expansions, or construction, among others.

“The Idaho Bankers Association was glad to partner with Idaho Housing and Finance Association in this effort to get the SSBCI dollars into Idaho,” said Dawn Justice, president and CEO of the Idaho Bankers Association. “This great public/private partnership will provide an opportunity for small business borrowers to have access to the additional collateral they need to get over the final hurdle toward loan approval. This program will definitely benefit Idaho’s economic recovery.”

“We’re very pleased with the news that Idaho’s program to administer the SSBCI has been approved. This is a great opportunity to help financial institutions work with their small business customers to get established or to expand, to create jobs and to grow our economy. Idaho is very fortunate to have Idaho Housing and Finance Association as our partner who will administer the Idaho SSBCI program,” said Don Dietrich, director of the Idaho Department of Commerce.

The program is a collaborative partnership among the U.S. Department of Treasury, the Idaho Department of Commerce, Idaho Housing and Finance Association, and the Idaho Bankers Association. The program is in its development phase and will be launching in November 2011. Small businesses interested in the program should contact their banking institution directly in November for more information.

For more information about the SSBCI, please visit the U.S. Department of Treasury website.

###

Idaho Housing and Finance Association, a financial services and housing business organization, improves lives and strengthens Idaho communities by expanding housing opportunities, building self sufficiency, and fostering economic development.

Contact:
Maria Ortega mariao (at) ihfa (dot) org
Public and Media Relations Officer
208-331-4858
Katrina Thompson katrinat (at) ihfa (dot) org
Marketing and Communications Manager
208-331-4738