SSBCI - 1

State Small Business 

Credit Initiative

FY 2013

President’s Budget

Submission
SSBCI - 2

Table of Contents

Section 1 – Purpose ....................................................................................................................... 3

1A – Mission Statement.............................................................................................................. 3

1.1 – Resource Detail Table........................................................................................................ 3

1B – Mission, Priorities and Context.......................................................................................... 3

Section 2 – Budget Adjustments and Appropriation Language............................................... 6

2.2 – Operating Levels Table...................................................................................................... 6

2A – Enacting Legislation .......................................................................................................... 6

2B – Legislative Proposals.......................................................................................................... 6

Section 3 – Budget and Performance Plan ................................................................................. 7

3A – State Small Business Credit Initiative Program................................................................. 7

3.1.1 – State Small Business Credit Initiative Program Budget and Performance Plan............. 8

3B – State Small Business Credit Initiative Administration....................................................... 8

3.1.2 – State Small Business Credit Initiative Administration Budget and Performance Plan .. 8

Section 4 – Supplemental Information........................................................................................ 9

4A – Capital Investment Strategy............................................................................................... 9
SSBCI - 3

Section 1 – Purpose

1A – Mission Statement

To increase the availability of credit for small business, to generate jobs and other economic 

development benefits for states, Treasury has implemented the State Small Business Credit 

Initiative.

1.1 – Resource Detail Table

Dollars in thousands

FY 2011 

Actual

FY 2012

Estimated

FY 2012

Estimated

% Change FY 2012 

to FY 2013

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Budgetary Resources:

Unobligated balances, Start of year $1,500,000 $235,707 $25,267 -89.28%

Total Budgetary Resources 

Available $1,500,000 $235,707 $25,267 -89.28%

Expenses/Obligations

SSBCI Program $1,258,900 $204,210 -100.00%

SSBCI Administration 5 $5,393 12 $6,230 12 $6,629 0.00% 6.40%

Total Expenses/Obligations 5 $1,264,293 12 $210,440 12 $6,629 0.00% -96.85%

1B – Mission, Priorities and Context

The SSBCI was created to fund new and existing state programs that support lending to small 

business in order to stimulate economic growth and new jobs. Under the SSBCI, participating 

states use the federal funds for programs that leverage private lending to help finance small 

businesses and manufacturers that are creditworthy, but are not getting the loans they need to 

expand and create jobs. The SSBCI will allow states to build on successful models for state 

small business lending and investment programs, including capital access programs (CAPs),

collateral support programs, loan guarantee programs, and venture capital funds. 

Priorities: 

 To provide direct funding support to states for use in programs designed to increase access to 

credit for small businesses.

 To support state CAPs and other credit support programs (OCSP) that support lending to 

small businesses and small manufacturers.

 To monitor the deployment of SSBCI funds among approved state programs and to ensure 

adherence to all Treasury compliance standards.

 To promote best practices in program design, operations, and marketing among state-run 

programs. 

 To provide dedicated technical assistance to states as they implement these programs and 

deploy funds to eligible small businesses.
SSBCI - 4

SSBCI Program Activities

On September 27, 2010, President Obama signed into law the Small Business Jobs Act of 2010 

(the Act). Section 3003 of the Act authorized and directed the Secretary of Treasury to establish 

a seven-year SSBCI, which was funded with $1.5 billion to support state programs that support

lending to small businesses and small manufacturers. The SSBCI is expected to support new 

small business lending through local programs that help entrepreneurs expand their businesses 

and create new jobs. 

Under the SSBCI, states were offered the opportunity to apply for federal funds for programs 

that partner with private lenders to extend greater credit to small businesses. States were required 

to demonstrate a reasonable expectation that a minimum of $10 in new private lending will result 

from every $1 in federal funding. Accordingly, the $1.5 billion funding commitment that the 

federal government has made for this program is expected to result in $15 billion in new private 

lending and investment to small businesses, aligning with Treasury’s strategic goal to repair and 

reform the financial system and support the recovery of the housing market. 

The SSBCI allows states to build upon existing, successful state-level small business lending 

programs, including examples such as CAPs, collateral support programs, and loan guarantee 

programs. 

 Capital Access Programs: CAPs, which are already up and running in over 20 states, are loan 

portfolio insurance programs in which states provide a matching contribution to bank loan 

loss reserves when lenders extend credit to qualified small businesses. These reserve 

enhancements allow lenders to expand credit to new borrowers at a time when many of these 

lenders might otherwise pull back. 

 Collateral Support Programs: Collateral support programs help viable businesses that are 

struggling to get credit because the value of the collateral they hold has fallen, often due to 

the decline in commercial real estate values. These programs – which set aside funds to 

augment collateral the borrower already holds – provide banks greater confidence in 

extending credit to these borrowers, particularly in some of the communities hardest hit by 

the economic downturn. 

 Loan Guarantee Programs: Under loan guarantee programs, states provide partial guarantees 

on small business loans to give lenders greater confidence to extend credit. 

 Venture Capital Programs: State-run venture capital programs provide equity to emerging 

businesses before they meet typical lending criteria or to support business investment in new 

or emerging sectors.

If a state did not have an existing small business program, the state could establish one in order 

to access this funding. 

The funding a state was eligible to apply for is determined based on formulas in the Small 

Business Jobs Act that take into account each state's unemployment rate and decline in 

employment relative to other states. Pursuant to the Act, funds are allocated to all fifty states 
SSBCI - 5

along with the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of 

Northern Mariana Islands, Guam, American Samoa, and the United States Virgin Islands. 

In FY 2011, over $435 million was approved for disbursement to approved applicants. Treasury 

plans to outlay most of the remaining funds in FY 2012 and FY 2013. Once approved, all 

funding for each respective entity is obligated. Outlays occur as tranches are received by the 

entities. In addition, less than 3% of the appropriation has been allocated to administrative 

expenses. The administrative costs will be expended over the seven-year life of the program. 

Office of Inspector General (OIG) Activities

In FY 2013, the OIG will continue to provide audit and investigative oversight of SSBCI. 

The Act directs the OIG to audit the use of SSBCI funds by participating states so that Treasury 

can recoup any misused funds identified by such audits. In 2010, the OIG established the SBLF 

Program Oversight Office headed by a Special Deputy Inspector General with responsibility for 

all audit and investigative activities relating to the Small Business Lending Fund (SBLF) and 

SSBCI programs. The office will hire a total of 19 full time equivalent (FTE) employees, the 

majority of whom will be on term appointments.

The FY 2013 budget request, funded with both SSBCI and SBLF administrative funds, will 

support the 19 full time equivalent employees and allow the OIG to augment its resources with 

contractors, as needed, to perform audits of recipients of SSBCI funds and financial institutions 

receiving SBLF investments. In FY 2012, OIG expects to utilize approximately $2.2 million in 

SSBCI administrative funding. In FY 2013, the amount is estimated at $2 million.

The budget level requested for FY 2013 will also allow the OIG to conduct a significant number 

of audits of the use of SSBCI funds. The OIG plans to audit both how the states are carrying out 

their oversight responsibilities and whether the institutions and businesses participating in the 

state programs funded by SSBCI are in compliance with loan-use restrictions and requirements. 

Because the OIG is legislatively mandated to audit whether states are appropriately using the 

SSBCI funds, and Treasury must provide states their entire funding allocation within 2 years of 

their entrance into the program, the OIG is expecting a significant level of audit activity in 2012. 

Further, since the majority of the allocated funds will be disbursed to states in three tranches, the 

OIG's audits will occur after states expend or obligate their first or second tranches to ensure that 

Treasury does not disburse the full state allocation when prior fund transfers have been misused. 

Therefore, the OIG expects a greater level of audit effort in FY 2012 and FY 2013 than in 

subsequent years.
SSBCI - 6

Section 2 – Budget Adjustments and Appropriation Language

2.2 – Operating Levels Table

Dollars in Thousands

State Small Business Credit Initiative FY 2011

Actual

FY 2012

Estimated

FY 2013 

Estimated

Direct FTE 5 12 12

Object Classification

11.1 Full-Time Permanent Positions..................................... $660 $1,749 $1,749 

12.0 Personnel Benefits......................................................... $184 $386 $477 

21.0 Travel............................................................................. $17 $155 $155 

23.1 Rental Payments to GSA............................................... $231 $231 

25.1 Advisory & Assistance Services................................ $2,830 $1,500 $2,000 

25.3 Purchase of Goods/Serv. from Govt. Accts............ $1,700 $2,207 $2,015 

26.0 Supplies and Materials.................................................. $2 $2 $2 

41.0 Grants, Subsidies........................................................... $1,258,900 $204,210 $0 

Total Operating................................................... $1,264,293 $210,440 $6,629

Budget Activities:

SSBCI Program $1,258,900 $204,210 

SSBCI Administration $5,393 $6,230 $6,629 

Total Budget Authority $1,264,293 $210,440 $6,629

2A – Appropriations Language and Explanation of Changes

SSBCI does not receive a discretionary appropriation authority from Congress. Therefore, no 

appropriations language is proposed.

2B – Legislative Proposals

SBBCI has no legislative proposals.
SSBCI - 7

Section 3 – Budget and Performance Plan

3A – State Small Business Credit Initiative Program

($204,210,000 of obligations in FY 2012 and $0 in FY 2013)

On September 27, 2010, President Obama signed into law the Small Business Jobs Act of 2010 

(the "Act"). Section 3003 of the Act authorized and directed the Secretary of Treasury to 

establish a seven-year SSBCI, which was funded with $1.5 billion to support state programs that 

support lending to small businesses and small manufacturers. The SSBCI is expected to support 

new small business lending and investment through innovative state and local programs that help 

entrepreneurs expand their businesses and create new jobs. The goal owner for this budget 

activity is the Assistant Secretary of Financial Institutions Cyrus Amir-Mokri.

Under the SSBCI, participating states will use the federal funds for programs that leverage 

private lending to help finance small businesses and manufacturers that are creditworthy, but are 

not getting the loans they need to expand and create jobs. The SSBCI will allow states to build 

on successful models for state small business programs, including CAPS, collateral support 

programs, and loan guarantee programs. Existing and new state programs are eligible for 

support under the SSBCI.

In FY 2011, Treasury established the SSBCI office, accepted applications from over 58 eligible 

entities by the statutory due dates, and over $435 million was approved for disbursement to 

approved applicants. SSBCI estimates disbursing cumulative totals of $1.219 billion by end of 

FY 2012 and $1.463 by the end of FY 2013, as states draw down their approved allocations 

under the program. Through November 30, 2011, Treasury has already obligated nearly $1.4 

billion of the $1.46 billion apportioned for funding to states. As a result, SSBCI anticipates that 

states will use these funds to support loans and investments made through approved state 

programs during FY 2012 and FY 2013.

In FY 2012 and FY 2013, Treasury will continue to monitor the performance of state programs, 

tracking loans and investments made with SSBCI funds, and disbursing the remaining obligated 

funds to states once funds have been deployed to eligible small businesses. SSBCI plans to 

disposition 99 percent of all state requests for subsequent disbursements within 90 calendar days 

of receipt. Treasury will also be providing on-going technical supports to states as state programs 

evolve. Finally, Treasury will be promoting national best practices among states on such 

elements as program design, operations, and marketing.
SSBCI - 8

3.1.1 – State Small Business Credit Initiative Program Budget and Performance Report 

and Plan

Dollars in Thousands

SSBCI Program

Resource Level FY 2006

Actual

FY 2007

Actual

FY 2008

Actual

FY 2009

Actual

FY 2010

Actual

FY 2011

Actual

FY 2012 

Estimated

FY 2013 

Estimated

SSBCI Program Outlay 

Levels $0 $0 $0 $0 $0 $366,000 $853,000 $244,000

Total Resources $0 $0 $0 $0 $0 $366,000 $853,000 $244,000

Budget Activity Total $0 $0 $0 $0 $0 $366,000 $853,000 $244,000

FY 2006

Actual

FY 2007

Actual

FY 2008

Actual

FY 2009

Actual

FY 2010

Actual

FY 2011

Actual

FY 2012 

Target

FY 2013 

Target Measure

Cumulative Value of 

SSBCI Funds 

Transferred to States

($M)

N/A N/A N/A N/A N/A $366M $1,219 M $1,463 M

State Subsequent 

Disbursement Requests 

Dispositioned w/in 90 

days (%)

N/A N/A N/A N/A N/A N/A 99 99

Key: DISC - Discontinued, and B= Baseline

Approved amounts are fully obligated, but outlayed in one-third tranches. For FY 2011 actuals, though 

$366 million was outlayed, over $435 million was approved for disbursement to approved applicants.

3B – State Small Business Credit Initiative Administration

($6,230,000 in FY 2012 and $6,629,000 in FY 2013)

The authority to pay administrative expenses is provided by Section 3009 (b) of the Act which 

appropriates $1.5 billion to carry out the state small business credit program "including to pay 

reasonable costs of administering the program." Administrative expenses include the costs of 

government employee salaries, contract support, and reimbursement to the Treasury Office of 

Inspector General for program audits. 

3.1.2 – State Small Business Credit Initiative Administration Budget and Performance 

Report and Plan

Dollars in Thousands

SSBCI Administration

Resource Level FY 2006

Actual

FY 2007

Actual

FY 2008

Actual

FY 2009

Actual

FY 2010

Actual

FY 2011

Actual

FY 2012 

Estimated

FY 2013 

Estimated

SSBCI Administration $0 $0 $0 $0 $0 $5,393 $6,230 $6,629

Total Resources $0 $0 $0 $0 $0 $5,393 $6,230 $6,629

Budget Activity Total $0 $0 $0 $0 $0 $5,393 $6,230 $6,629
SSBCI - 9

Section 4 – Supplemental Information

4A – Capital Investment Strategy

SSBCI uses Departmental Offices systems and is part of DO’s capital investment strategy. 

SSBCI also, through an interagency agreement of approximately $275 thousand, utilizes the 

Community Development Financial Institutions Fund Community Investment Impact System

(CIIS). The Act requires the states, territories, District of Columbia, and municipalities receiving 

SSBCI funds (―recipients‖) to submit quarterly and annual reports, and the SSBCI Allocation 

Agreement—which clarifies the terms and conditions governing the transfer of funds to the 

recipient—specifies the exact data elements that recipients must provide in these reports. These 

quarterly and annual reports are similar to the surveys that CIIS collects from CDFI recipients. 

As a result, SSBCI is leveraging this existing system to meet its data collection needs.