The United States plans to provide $ 10 billion in capital to help start-up companies rebuild their communities and stimulate greater economic recovery from the epidemic.
State microfinance loans direct funds to state, state, and tribal governments for venture capital programs or encourage private lenders to lend to small companies. The program will revise the policy that followed the economic downturn of 2007-2009, when banks cut off loans to small businesses.
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$ 10 billion is more than six times the previous program. The groups include ethnic minorities, rural communities, and veterans in accordance with program guidelines.
The money came from the $ 1.9 trillion Corona Virus Aid Congress last March. The Treasury Department expects payment in the first quarter of 2022. States and other recipients have the flexibility to design their programming offerings as per the requirements set by the Treasury Department.
Amid growing skepticism about plans to spend on health care, education, and climate change programs, the event comes as other parts of President Biden’s small business agenda stand still.
Meanwhile, the White House is under pressure from some Democratic partners to address concerns about racial inequality and wealth inequality. “The purpose of the program is to create a business that will not leave behind people with good ideas and entrepreneurship because of where they want to start their business or because of skin color or any other unacceptable obstacle,” said Jean Sparling. Mr. Biden’s Adviser.
Some Republicans have argued that the $ 10 billion program is unnecessary because more than $ 1 trillion in federal funds have already been transferred to small businesses.
Blaine Luthemeier (R., Mo.), a member of the House of Representatives’ Small Business Committee, said existing federal programs should be used to target small businesses that have difficulty accessing capital. “The programs are there,” he said. It is a matter of raising business awareness.
The Treasury Department said the funds under the Small Business Loans Initiative were not intended to fill income gaps caused by the epidemic, but rather to help small businesses access capital resources to support long-term recovery and growth.
A.D. In 2020, the response to the George Floyd Massacre in Minneapolis and the State Epidemic sparked a new national debate on the ability of ethnic and minority businesses to capitalize on capital. Such businesses have expressed concern about the possibility of obtaining a pandemic protection program, or PPPP, to help small businesses deal with outbreaks.
A census data from the Federal Reserve Bank of Cleveland found that PPP loans by 2020 will be unequal for businesses in low- and middle-income areas. Businesses in areas where blacks, Hispanics, Americans, Indians, or Alaska natives receive an average of PPP loans.
Extensively, survey data from the Federal Reserve show that small-scale businesses are less likely to receive the financial support they need than white businesses.
The State Small Business Credit Initiative initially allocated $ 1.5 billion to businesses owned by people in social and economic need. Another $ 500 million has been earmarked for businesses with less than 10 employees.
Holly Hunt State, which administers the Georgia State Small Business Credit Initiative Program, said it plans to expand its existing $ 200 million loan program with banks and community lenders and launch new operations. – Capital Program.
According to Hunt, the Venture-Capital program helps young businesses with the money they need to support their growth without falling into debt. She hopes the funding will increase the number of private lenders involved in state programs, especially in rural and sparsely populated areas.
“If I could, I would like to see one in every county,” she said, referring to the program’s lenders. “I will not stop until I have made the whole county stand out on the small map of Georgia.”
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