New lending law spawns $23M for state
Funds coming as soon as possible,' Treasury official says
Maryland is set to receive $23 million from the federal government under the new small-business lending law, which officials hope can be leveraged to provide $230 million through private-sector loans.
Gene Sperling, counselor to Treasury Secretary Timothy Geithner, said he could not specify when Maryland will receive the money, but he hoped it would be "as soon as possible."
"We will move expeditiously," Sperling said.
The money is part of a $1.5 billion state credit initiative modeled after the Maryland Industrial Development Financing Authority in the new Small Business Jobs Act. Maryland officials, including Gov. Martin O'Malley (D), were instrumental in helping develop that program, Sperling said.
The funds will mean thousands of jobs for Maryland, said Christian S. Johansson, secretary of the state Department of Business and Economic Development, who testified in May before the House Committee on Financial Services on the bill. The Maryland Industrial Development Financing Authority has provided more than $2 billion in loan and bond guarantees since 1965, and officials enhanced the program this year to use it more for smaller loans.
"At the end of the day, this is about jobs," Johansson said. "These programs have a track record and have a transformational effect throughout the state."
The federal law, enacted in late September, also provides a $30 billion fund for community bank loans to small businesses as well as enacting new tax cuts and expanding U.S. Small Business Administration loan programs.
The tax credits portion of the law probably will be more useful to Officepro than the lending part, said Judy Stephenson, president of the Gaithersburg software-training company.
"We have a good banking relationship and have not experienced any drying up of credit. We have an established line of credit," Stephenson said. "Offering tax credits might spur some buying for businesspeople to go out and purchase something such as computers."
Anything that can be done to help businesses in the short term is welcome, she said.
"The real issue here is making good lending decisions," Stephenson said.
Access to capital is critical to helping small businesses grow and add jobs, said Georgette "Gigi" Godwin, president and CEO of the Montgomery County Chamber of Commerce.
"Small businesses are the backbone of our local economy," she said.
The state will conduct workshops through Nov. 10 to educate bankers and other lenders on the small-business guarantee program and other initiatives. Those include ones Wednesday at Allegany College in Cumberland; Thursday at Hagerstown Community College; Oct. 27 at Carroll Community College in Westminster; and Oct. 28 at Frederick Community College.