State Small Business Credit
 

Initiative
 

2015 President’s Budget
 
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 ............................................... 8

2.1 – Budget Adjustments Table................................................................................................. 8

2A – Budget Increases and Decreases Description..................................................................... 8

2.2 – Operating Levels Table ...................................................................................................... 9

2B – Appropriations Language and Explanation of Changes................................................... 10

2C – Legislative Proposals........................................................................................................ 10

Section 3 – Budget and Performance Plan ............................................................................... 11

3A – State Small Business Credit Initiative Program ............................................................... 11

3.1.1 – State Small Business Credit Initiative Program Budget and Performance Plan ........... 12

3B – State Small Business Credit Initiative Administration Program ...................................... 12

3.1.2 – State Small Business Credit Initiative Administration Budget and Performance Plan 13

Section 4 – Supplemental Information...................................................................................... 14

4A – Summary of Capital Investments ..................................................................................... 14

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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 2013 FY 2014 FY 2015 FY 2014 to FY 2015 

Budgetary Resources Actual Estimated Estimated $ Change % Change 

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT 

Budgetary Resources: 

Recovery from Prior Years 0 2,155 0 2,310 0 1,000 0 (1,310) 0.00% -56.71% 

Mandatory – Collected 0 558 0 0 0 0 0 (0) 0.00% 0.00% 

Unobligated Balances from Prior Years 0 42,696 0 25,777 0 19,788 0 (5,989) 0.00% -23.23% 

Subtotal Budgetary Resources 0 $45,409 0 $28,087 0 $20,788 0 (7,299) 0.00% -25.99% 

Other Resources: 

SSBCI Program 0 $13,198 0 $0 0 $0 0 0 0.00% 0.00% 

SSBCI Administration 11 $6,431 14 $8,299 12 $6,752 (2) (1,547) -14.29% -18.64% 

Subtotal Other Resources 11 $19,629 14 $8,299 12 $6,752 (2) 1,547 -14.29% -18.64% 

Net Results 11 $25,777 14 $19,788 12 $14,036 (2) (5,752) 14.29% 29.07% 

*Amounts may differ from those printed!in!the FY 2015 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 Small Business Jobs Act of 2010 authorized and appropriated $1.5 billion for a program that 

sunsets in 2017. Due to the success of the first round of SSBCI, the President’s Budget proposes 

a second round of $1.5 billion for a program to run from 2015 through 2021. The second round 

expands on the success of the first round and capitalizes on new working relationships between 

states and small business lenders and investors. 

The SSBCI allows 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. 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. 

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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. 

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. Since the passage of the Small Business 

Jobs Act of 2010, the State Small Business Credit Initiative (SSBCI) has had a positive impact 

on small business access to capital and local economies. The first $271 million in program 

expenditures supported lending and investments of $1.9 billion to more than 4,600 small 

businesses across the country—creating or saving more than 53,000 jobs. 

1 The program’s 

success is expected to help spur up to $15 billion in new small business lending and investing 

through local programs that help entrepreneurs expand their businesses and create new jobs. 

Proposal for Extension 

The President’s budget calls for a new authorization of the SSBCI to build on the momentum of 

the program’s first round of funding and strengthen the Federal government’s relationships with 

state economic development agencies, which are highly responsive to capital needs in local 

markets. This additional $1.5 billion would be awarded in two allocations: $1 billion awarded 

on a competitive basis to states best able to target underserved groups, leverage Federal funding, 

and evaluate results and $500 million awarded by a need-based formula based on economic 

factors such as job losses and pace of economic recovery. 

Program Activity to Date 

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. SSBCI support 

helps borrowers address a credit weakness due to devaluation of collateral, a short track record, 

or short-term reduction in sales or cash flow due to the recession. The SSBCI allows states to 

build upon existing, successful state-level small business lending and investing programs, 

including examples such as Capital Access Programs (CAPs), collateral support programs, loan 

participation programs, loan guarantee programs, and state-sponsored venture capital programs. 

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

to access this funding. 

1 Source for transaction and job creation and retention figures is the annual report data submitted by states for the 

periods ending December 31, 2011 and 2012. States report data for 2013 on March 30, 2014. 

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By the end of FY 2013, 55 of the 57 program participants reported using SSBCI funds to support 

loans or investments in businesses using disbursed funds. Treasury expended, obligated, or 

transferred (collectively, disbursed) over $379 million in FY 2013 and $911 million 

cumulatively, to states. As of February 12, 2014, Treasury had disbursed to states approximately 

$1 billion of the $1.5 billion total. Treasury plans to disburse most of the remaining funds in FY 

2014 and FY 2015. States report transaction details to Treasury on an annual basis. Data through 

December 2012, the first 18 months of activity, when states expended $271 million in SSBCI 

funds to leverage $1.9 billion in private financing, suggest the following key findings: 

•	 SSBCI funds have already supported thousands of loans and investments that might 

not otherwise have been made to small businesses in a wide range of sectors. SSBCI 

financing reached small businesses in industries ranging from retail trade to 

manufacturing, hospitality, and many types of services. About two-thirds of all SSBCI 

loans or investments were for less than $100,000, and the average SSBCI loan or 

investment size was $327,000. The SSBCI funds resulted in total financing per small 

business of $404,000 

•	 SSBCI funds have helped create or save more than 53,000 American jobs. The small 

business owners who received financing expect that the loans and investments they 

received will create over 17,000 jobs within two years and help retain more than 36,000 

jobs that were at risk of loss. 

•	 SSBCI funds support businesses with the highest potential to create new jobs. More 

than half of all SSBCI loans or investments went to young businesses less than five years 

old, which economic research by the Kauffman Foundation suggests are more likely to 

create new jobs than similarly-sized businesses that are farther along in their 

development. Nearly 80 percent of SSBCI loans and investments went to businesses with 

10 or fewer employees. 

•	 Forty-two (42) percent of SSBCI loans and investments were made to businesses in 

low- and moderate-income communities with incomes at or below 80 percent of the 

area median income. SSBCI has been effective in supporting small businesses in areas 

that were hit hardest by the recession and where the need is greatest. 

•	 Through 2012, SSBCI operations have already generated $6.58 in new small 

business lending or investing for every $1 of federal support. States expect private 

sector leverage to increase to 10 to 1 before the program concludes. 

•	 SSBCI has helped create over 82 new small business support programs, 

approximately 50 percent of the programs currently disbursing SSBCI funds. 

Through the availability of SSBCI funds, a new infrastructure of credit support programs 

has been created across the country. 

States were eligible to apply for funding based on formulas in the Small Business Jobs Act that 

take into account each state's decline in employment relative to the overall national decline. 

Pursuant to the Act, funds were available to all 50 states along with the District of Columbia, the 

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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 2013, Treasury approved a total of 57 allocations to 47 states, the District of 

Columbia, five U.S. territories, and four municipalities (or consortia of municipalities) from 

three states, Alaska, North Dakota, and Wyoming. Once approved, all funding for each 

respective entity is allocated. Treasury outlays funds to participating states in three 

disbursements. Outlays occur as the participating states expend, obligate, and transfer the funds 

and submit disbursement requests to Treasury. In addition, less than 3 percent of the 

appropriation has been allocated to Treasury administrative expenses. Treasury will expend 

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

FY 2015 Program Activity 

In FY 2015, the SSBCI will continue to monitor and provide technical assistance to states 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. 

The President’s Budget proposes a new SSBCI authorization of $1.5 billion (Round 2). SSBCI 

will also administer the application phase of the proposed extension during FY 2015. Round 2 

would be awarded in two parts: $1 billion awarded on a competitive basis to states for 

applications that demonstrate the greatest potential impact and $500 million allocated to states 

according to a need-based formula. Competitive scoring would include a state’s demonstrated 

need for funding, targeting of underserved communities, and the proposals’ potential to attract 

private investment for startup or early stage businesses, among other factors. During FY 2015, 

SSBCI would administer both the formula and competitive award process with some awards 

made in FY 2015 and the remainder in FY 2016. Treasury estimates outlays to states of $274 

million in FY 2015 with most of the remaining outlays under Round 2 occurring in FY 2016 and 

FY 2017. 

Outlays to Participating States for SSBCI Round 1 and 2* 

FY 2011 

Actual 

FY 2012 

Actual 

FY 2013 

Actual 

FY 2014 

Es tim ated 

FY 2015 

Es tim ated 

FY 2016 

Es tim ated 

FY 2017 

Es tim ated 

FY 2018 

Es tim ated Total 

Round 1 Outlays 366 187 364 383 140 - - - 1,440 

Round 2 Outlays - - - - 274 622 534 30 1,460 

Total 366 187 364 383 414 622 534 30 2,922

*Data does not include outlays for Treasury%administrative expenses.

Office of Inspector General (OIG) Activities 

In FY 2015, the OIG will continue to provide audit and investigative oversight of SSBCI. The 

authorizing legislation the program 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. 

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The FY 2015 budget request will support the 15 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 

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

Because many states did not draw on all of their allocated funds by the two year anniversary of 

their Allocation Agreements, Treasury extended the timeframe for the disbursement of funds 

until FY 2015. The OIG is expecting to perform a significant number of audits during FY 2015 

as states increase their use of funds and request additional disbursements from Treasury. 

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State Small Business Credit Initiative FTE Amount 

FY 2014 Estimated 14 $8,299 

Changes to Base: 

Maintaining Current Levels (MCLs): - $99 

Pay-Raise - $26 

Non-Pay - $73 

Subtotal Changes to Base - $99 

Total FY 2015 Base 14 $8,398 

Program Changes: 

Program Decreases: (2) ($1,646) 

Program Reduction (2) ($1,646) 

Total FY 2015 Estimated 12 $6,752 

 

 

 

 

Section 2 – Budget Adjustments and Appropriation Language 

2.1 – Budget Adjustments Table 

Dollars in Thousands 

2A – Budget Increases and Decreases Description 

Maintaining Current Levels (MCLs) ........................................................... +$99,000 / +0 FTE
 

Pay-Raise +$26,000 / +0 FTE 

Funds are requested for the proposed January 2015 pay-raise and annualization of the January 

2014 pay raise. 

Non-Pay +$73,000 / +0 FTE 

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

adjustments, postage, supplies, and equipment. 

Program Decreases .....................................................................................-$1,646,000 / -2 FTE
 

Program Reduction -$1,646,000 / -2 FTE 

Contract and personnel support related to state technical assistance will decrease as the funding 

allocated to the states and municipalities becomes fully expended. 

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Dollars in Thousands 

State Small Business Credit Initiative FY 2013 FY 2014 FY 2015 

Object Classification Actual Estimated Estimated 

11.1 - Full-time permanent 1,204 1,513 1,397 

11.9 - Personnel Compensation (Total) 1,204 1,513 1,397 

12.0 - Personnel benefits 340 547 505 

Total Personnel and Compensation Benefits $1,544 $2,060 $1,902 

21.0 - Travel and transportation of persons 70 125 125 

23.1 - Rental payments to GSA 202 208 214 

25.1 - Advisory and assistance services 2,332 2,495 1,100 

25.2 - Other services 0 182 178 

25.3 - Other purchases of goods & serv frm Govt accounts 2,261 3,199 3,203 

26.0 - Supplies and materials 22 30 30 

41.0 - Grants, subsidies, and contributions 13,198 0 0 

Total Non-Personnel 18,085 6,239 4,850 

Total Budgetary Resources $19,629 $8,299 $6,752 

Budget Activities: 

SSBCI Program 13,198 0 0 

SSBCI Administration 6,431 8,299 6,752 

Total Budgetary Resources $19,629 $8,299 $6,752 

FTE 11 14 12 

2.2 – Operating Levels Table 

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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 

The Administration recommends new legislation authorizing a $1.5 billion extension of the 

SSBCI. Of the total amount proposed, $1 billion will be competitively awarded to states best 

able to target underserved groups, leverage Federal funding, and evaluate results. An additional 

$500 million will be allocated to states according to a need-based formula. 

Justification 

SSBCI effectively supports state-sponsored public-private partnerships to increase lending and 

investment to small businesses and manufacturers. SSBCI is already achieving results: the first 

$271 million in program expenditures supported lending and investments of $1.9 billion to more 

than 4,600 small businesses across the country—creating or saving more than 53,000 American 

jobs. The Budget proposes to improve the targeting of SSBCI funding through competitive 

awards. A second round of SSBCI funding would also increase the impact of states’ newly 

developed relationships with lenders and investors from the program’s first round, and would 

solidify a role for state economic development agencies which are highly responsive to capital 

needs in local markets. Further, because an extended program would build on the successes of 

newly created programs or legacy programs that were restarted with SSBCI funding, Treasury 

estimates that it would outlay funds at a faster rate than under the first round of funding. 

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Section 3 – Budget and Performance Plan 

3A – State Small Business Credit Initiative Program 

($0 in FY 2014 and $0 in FY 2015 in the base program) 

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 supports 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 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 allows 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. 

By the end of FY 2013, states reported expending, obligating or transferring over $677 million in 

SSBCI funds more than double the total at the end of FY 2012. As of February 2014, in less than 

three years of program activity, Treasury has disbursed over $1 billion, or 70% of allocations to 

states. SSBCI estimates disbursing cumulative totals of approximately $1.3 billion by the end of 

FY 2014 and $1.44 billion by the end of FY 2015, as states request disbursement of their 

approved allocations under the program. 

In FY 2015, 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. Treasury 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 thous ands 

SSBCI Pr ogr am FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 

Re s o ur ce L e ve l Actual Actual Actual Actual Actual Actual Es tim at e d Es tim ate d 

Ex pens es /Obligations $0 $0 $0 $1,258,900 $188,384 $13,198 $0 $0 

Bu dg e t Act ivit y To t al $0 $0 $0 $1,258,900 $188,384 $13,198 $0 $0 

Me as ur e FY 2008 FY 20009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 

Actual Actual Actual Actual Actual Actual Tar ge t Tar ge t 

Cumulative Value of SSBCI Funds 

Trans ferred to States N/A N/A N/A $366,000 $553,000 $917,000 $1,300,000 $1,440,000 

State Subsequent Disbursement

Requests Approved or Denied within 

90 days N/A N/A N/A N/A 100 100 90 90 

State Requests to Modify Allocation

Agreements Approved or Denied

within 90 days N/A N/A N/A N/A 100 90 90 90 

Receive State Quarterly Reports

within five business day of reporting 

deadline N/A N/A N/A N/A 100 93 90 90 

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

By serving as a source of funding for credit support and investment programs that increase 

access to capital for small businesses, SSBCI is aligned to Treasury’s Strategic Goal 1 “to 

promote domestic economic growth and stability while continuing reforms of the financial 

system” including managing and exiting emergency programs. Additionally, the SSBCI is 

aligned with Treasury’s Strategic Goal 2, “Enhance U.S. Competitiveness...” by supporting 

lending to and investment in startup and early stage companies. 

SSBCI sets three performance goals to measure the efficiency of program operations where 

Treasury can expressly influence the outcomes. The first goal is that Treasury approves or 

denies 90 percent of states’ requests for a subsequent disbursement of funds within 90 days of 

receipt of a formal submission. In FY 2013, SSBCI processed 100 percent of requests within 90 

days excluding requests that were delayed due to ongoing or unresolved audits by the OIG. 

Similarly, SSBCI aims to process 90 percent of all requests by states to modify the Allocation 

Agreement with Treasury within 90 days. In FY 2013, SSBCI processed 90 percent of requests 

within 90 days, less than the 100 percent in FY 2012, due to an increased volume of requests 

from states to modify their Allocation Agreements to add or materially change their programs. 

Finally, SSBCI aims to collect 90 percent of all quarterly reports within five days of the deadline 

to report. In FY 2013, SSBCI received 93 percent of quarterly reports from states within five 

business days of the reporting deadline. 

The value of SSBCI funds transferred to states is driven by program activity at the state level. 

Many states used SSBCI funds to start new programs or re-start legacy programs which took 

time to ramp up. In FY 2013, states requested $379 million compared to $172 million in FY 

2012. 

3B – State Small Business Credit Initiative Administration Program 

($8,299,000 in FY 2014 and $6,752,000 in FY 2015) 

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 

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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 thous ands 

SSBCI Adm inis tr ation FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 

Re s our ce Le ve l Actual Actual Actual Actual Actual Actual Es tim ate d Es tim ate d 

Ex pens es /Obligations $0 $0 $0 $5,393 $4,746 $6,431 $8,299 $6,752 

Budge t Activity Total $0 $0 $0 $5,393 $4,746 $6,431 $8,299 $6,752 

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

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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 at: http://www.treasury.gov/about/budgetperformance/Pages/summary-of-capital-investments.aspx 

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