The Iowa Department of Economic Development along with the United States Treasury announced that Iowa’s application for funds through the State Small Business Credit Initiative (SSBCI) has been approved. This will allow Iowa to access up to $13.2 million in order to help small businesses get started and to expand.
The SSBCI program was created via legislation called the Small Business Jobs Act, which was signed into law by President Obama during the fall of 2010. The original vote in the U.S. House took place in June, passing 241-182. 238 Democrats supported the bill, while 13 opposed it. Only 3 Republicans supported it, while 169 opposed it. Iowa Representatives split along party lines with the Democrats supporting it, while Representatives King and Latham opposed it. In September, the Senate took up the bill where it amended it and passed it by a vote of 61-38. All 57 Democrats supported it, while only 2 Republicans voted for it and 38 Republicans opposed it. Senator Harkin supported the bill and Senator Grassley opposed it. The bill moved back to the House where it passed 237-187, with none of the Iowa delegation votes changing.
The Department of Economic Development announced via its press release that it plans to leverage the $13.2 million against private funds at a 1:10 rate. This means that for every $1 of federal money distributed by the Department under the program, it would need to be matched by $10 of private money. In theory, this would allow for the addition of $132 million in new private lending in the state. The program will allow for easier access to credit for small businesses. The press release also stated that the Department will create a new program: the Iowa Capital Access Program. The Department will also insert the funds into two existing programs: the Iowa Small Business Loan Program, a microloan program, and into the Iowa Demonstration Fund Program, which is a venture capital program. Specific details of how the Department of Economic Development intends to fully use the funds should be forthcoming.