State Small Business Credit 

Initiative

2014 President’s Budget
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Table of Contents

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

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

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

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

Section 2 – Budget Adjustments and Appropriation Language............................................... 7

2.1 – Budget Adjustments Table................................................................................................. 7

2A – Budget Increases and Decreases Description..................................................................... 7

2.2 – Operating Levels Table...................................................................................................... 8

2B – Appropriations Language and Explanation of Changes..................................................... 8

2C – Legislative Proposals.......................................................................................................... 8

Section 3 – Budget and Performance Plan ................................................................................. 9

3A – State Small Business Credit Initiative Program................................................................. 9

3.1.1 – State Small Business Credit Initiative Program Budget and Performance Plan........... 10

3B – State Small Business Credit Initiative Administration Program...................................... 10

3.1.2 – State Small Business Credit Initiative Administration Budget and Performance Plan 10

Section 4 – Supplemental Information...................................................................................... 11

4A – Summary of Capital Investments..................................................................................... 11
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 (SSBCI).

1.1 – Resource Detail Table

Dollars in Thousands

State Small Business Credit Initiative FY 2012 FY 2013 FY 2014 FY 2012 to FY 2014

Budgetary Resources Actual Estimated Estimated $ Change % Change

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Budgetary Resources:

Unobligated Balances from Prior Years 0 235,708 0 42,578 0 24,633 0 (211,075) 0.00% -89.55%

Recoveries 0 0 0 3,400 0 0 0 0 0.00% 0.00%

Subtotal Budgetary Resources 0 $235,708 0 $45,978 0 $24,633 0 (211,075) 0.00% -89.55%

Other Resources:

SSBCI Program 0 $188,384 0 $13,000 0 $0 0 (188,384) 0.00% -100.00%

SSBCI Administration 9 $4,746 14 $8,345 16 $6,905 7 2,159 77.78% 45.49%

Subtotal Other Resources 9 $193,130 14 $21,345 16 $6,905 7 (186,225) 77.78% -96.42%

Net Results 9 $42,578 14 $24,633 16 $17,728 7 ($24,850) 77.78% -58.36%

*Amounts may differ from those printed in the FY 2014 President’s Budget Appendix due to rounding.

1B – Vision, Priorities and Context

The SSBCI funds new and existing state programs that support lending to and investment in 

small businesses 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, loan participation programs and 

venture capital programs. 

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 and 

investment in 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.
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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 and 

investing programs, including examples such as CAPs, collateral support programs, loan 

participation programs, loan guarantee programs, and state-sponsored venture capital 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 Participation Programs: Loan participation programs are a risk-sharing arrangement 

between the participating state and a financial institution lender. The first type uses SSBCI 

funding to purchase a portion of a loan originated by a lender to a small business borrower. 

The second type uses SSCBI funding to provide a direct loan to the borrower that is a 

companion loan to one originated by a lender. In addition, states may structure their 

purchased participation or companion loan at a lower interest rate than the financial 

institution’s loan which reduces the cash flow burden on the small business borrower. 

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

on small business loans to give lenders greater confidence to extend credit. 
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 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 was 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 were available to all 50 states 

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 the 

event a state chose not to participate in SSBCI, then municipalities in that state could apply for 

the state’s allocation. Ultimately, 47 of 50 states applied to participate in SSBCI (North Dakota, 

Wyoming and Alaska did not apply).

Through FY 2012, Treasury approved allocations to 47 states, the District of Columbia, five U.S. 

territories, and four municipalities in Alaska, North Dakota and Wyoming. (In December 2012, 

Treasury completed the obligation of all state allocations by awarding the final allocation to 

municipalities in Wyoming.) Once approved, all funding for each respective entity is obligated. 

Treasury transfers funds to participating states in three disbursements (outlays). Outlays occur as the 

participating states use the funds and submit disbursement requests to Treasury. In addition, less 

than 3 percent of the appropriation has been allocated to administrative expenses. Treasury will 

expend administrative costs over the seven-year life of the program.

The SSBCI will expand individualized technical assistance to state-level program managers in 

order to increase the effectiveness and rate of deployment of SSBCI funds. Treasury staff and 

contractors will provide services that include training and support for program design, 

operations, and outreach to financial institutions. Estimated obligations for FY 2014 of $1.4 

million do not include a $2 million request for SSBCI technical assistance support that is 

included in the Treasury Departmental Office appropriation request.

By the end of FY 2012, 47 states and three territories reported using SSBCI funds to support loans or 

investments in businesses using disbursed funds. In FY 2012, Treasury disbursed (outlaid) over 

$137 million to approved applicants. Treasury plans to outlay most of the remaining funds in FY 

2013 and FY 2014.

Office of Inspector General (OIG) Activities

In FY 2014, the OIG will continue to provide audit and investigative oversight of SSBCI. The 

authorizing legislation for this small business lending initiative 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. 

The FY 2014 budget request will support the 8 SSBCI-OIG employees and allow the OIG to 

augment its resources with contractors, as needed, to perform 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 
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programs funded by SSBCI are in compliance with loan-use restrictions and requirements. 

Because the Act authorizes Treasury to terminate any allocation to a state not transferred within 

2 years of its entrance into the program and many states did not receive their first disbursement 

until FY 2012, the OIG is expecting a significant level of audit activity in FY 2014.
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Section 2 – Budget Adjustments and Appropriation Language

2.1 – Budget Adjustments Table

Dollars in Thousands

State Small Business Credit Initiative FTE Amount

FY 2012 Actual 9 $4,746

FY 2013 Estimated 14 $8,345

Changes to Base:

Adjustments to Estimate: - -

Maintaining Current Levels (MCLs): - $101

Pay-Raise - $17

Non-Pay - $84

Subtotal Changes to Base - $101

Total FY 2014 Base 14 $8,446

Program Changes:

Program Decreases: - ($1,787)

Contract and Other Adjustments - ($1,787)

Program Increases: 2 $246

Staffing Level Adjustment 2 $246

Total FY 2014 Estimated 16 $6,905

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) .........................................................+$101,000 / +0 FTE

Pay-Raise +$17,000 / +0 FTE 

The President’s Budget proposes a one percent pay raise for Federal employees in 2014.

Non-Pay +$84,000 / +0 FTE 

Funds are requested for inflation adjustments in non-labor expenses such as GSA rent 

adjustments, postage, supplies and equipment.

Program Decreases ....................................................................................-$1,787,000 / +0 FTE

Contract and Other Adjustments -$1,787,000 / +0 FTE 

In order to accelerate the provisions of technical assistance in FY 2013, SSBCI proposes 

reductions in contract support and other adjustments in the SSBCI multi-year account. Estimated 

obligations for FY 2014 do not include the $2,000,000 request for SSBCI technical assistance 

support that is included in the Treasury Departmental Office appropriation request.

Program Increases .......................................................................................+$246,000 / +2 FTE

Staff Level Adjustment +$246,000 / +2 FTE 

States with low use of SSBCI funds often do not have robust working relationships with 

financial institutions. SSBCI will add relationship managers to monitor the engagement of 

financial institutions in SSBCI-funded programs, support state outreach to the lending industry, 

and provide technical assistance. Treasury will devote more resources to communicating 

directly with smaller regional lenders and interfacing with financial trade groups.
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2.2 – Operating Levels Table

Dollars in Thousands

State Small Business Credit Initiative FY 2012 FY 2013 FY 2014

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 1,142 1,756 2,027

11.9 - Personnel Compensation (Total) 1,142 1,756 2,027

12.0 - Personnel benefits 318 492 568

Total Personnel and Compensation Benefits $1,460 $2,248 $2,595

21.0 - Travel and transportation of persons 58 125 250

23.1 - Rental payments to GSA 233 262 270

25.2 - Other services 626 3,367 1,352

25.3 - Other purchases of goods & serv frm Govt accounts 2,362 2,333 2,427

26.0 - Supplies and materials 7 10 12

41.0 - Grants, subsidies, and contributions 188,384 13,000 0

Total Non-Personnel 191,670 19,097 4,311

Total Budgetary Resources $193,130 $21,345 $6,905

Budget Activities:

SSBCI Program 188,384 13,000 0

SSBCI Administration 4,746 8,345 6,905

Total Budgetary Resources $193,130 $21,345 $6,905

FTE 9 14 16

*Amounts may differ from those printed in the FY 2014 President’s Budget Appendix due to rounding.

**FY 2014 estimate does not include $2M in additional funding proposed in the Treasury Departmental Offices 

budget for contracted technical assistance support.

2B – Appropriations Language and Explanation of Changes

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

appropriations language is proposed.

2C – Legislative Proposals

SSBCI has no legislative proposals.
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Section 3 – Budget and Performance Plan

3A – State Small Business Credit Initiative Program

($13 million of obligations in FY 2013 and $0 in FY 2014)

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. 

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 2012, Treasury approved $137 million for disbursement to approved applicants. 

Cumulatively, through FY 2012, SSBCI has approved disbursements of $553 million. SSBCI 

estimates disbursing cumulative totals of approximately $1.1 billion by the end of FY 2013 and 

$1.46 billion by the end of FY 2014, as states request disbursement of their approved allocations 

under the program. 

In FY 2013, Treasury will continue to monitor the performance of state programs, tracking loans 

and investments made with SSBCI funds, and disbursing obligated funds to states. In addition, 

Treasury will process requests from states to modify their programs in order to improve 

performance. SSBCI plans to approve or deny 90 percent of all state requests for modifications 

and subsequent disbursements within 90 calendar days of final receipt. Additionally, Treasury 

plans to collect 90 percent of all quarterly reports within five days of the deadline to report. 

Treasury will also provide on-going technical support to recipients, including the dissemination 

of practices among recipients on such elements as program design, operations, and marketing.
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3.1.1 –State Small Business Credit Initiative Program Budget and Performance Plan

Dollars in thousands

SSBCI Program

Resource Level FY 2011 FY 2012 FY 2013 FY 2014

Actual Actual Estimated Estimated

Expenses/Obligations $1,258,900 $188,384 $13,000 $0 

Budget Activity Total $1,258,900 $188,384 $13,000 $0 

Measure FY 2011 FY 2012 FY 2013 FY 2014

Actual Target Target Target

Cumulative Value of SSBCI Funds 

Transferred to States $366,000 $553,000 $1,084,000 $1,463,000 

State Subsequent Disbursement Requests 

Approved or Denied within 90 days N/A 100 90 90

State Requests to Modify Allocation 

Agreements Approved or Denied within 90 

days N/A 100 90 90

Receive State Quarterly Reports within five 

business day of reporting deadline N/A 100 90 90

Key: N/A - Not in Effect

*Excludes modification or disbursement requests and reports delayed due to unresolved OIG audits.

3B – State Small Business Credit Initiative Administration Program

($8,345,000 in FY 2013 and $6,905,000 in FY 2014)

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 Plan

Dollars in Thousands

SSBCI Administration

Resource Level FY 2011 FY 2012 FY 2013 FY 2014

Actual Actual Estimated Estimated

Expenses/Obligations $5,393 $4,746 $8,345 $6,905 

Budget Activity Total $5,393 $4,746 $8,345 $6,905 

For detailed information about each performance measure, including definition, verification and 

validation, please go to: http://www.treasury.gov/offices/management/dcfo/accountabilityreports/
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Section 4 – Supplemental Information

4A – Summary of Capital Investments

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

SSBCI also, through an interagency agreement of approximately $110 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 and 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.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed/downloaded here: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx