As of september 30 2014

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AS OF September 30, 2014

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Summary

On September 27, 2010, President Obama signed into law the Small Business Jobs Act of 2010 (P.L. 111-240) (the Act), creating the State Small Business Credit Initiative (SSBCI). SSBCI provides $1.5 billion to new and existing state programs that support privatesector lending to, and investment in, small businesses and small manufacturers.

In 2011 and 2012, Treasury approved applications on a rolling basis from 47 states, the District of Columbia, and five territories and municipalities in three states (approved entities will be referred to as States).1 States could divide their allocation among several types of small business support programs: Loan Participation Programs (LPPs), Venture Capital Programs (VCPs), Loan Guarantee Programs (LGPs), Collateral Support Programs (CSPs), and Capital Access Programs (CAPs). States receive SSBCI funding in three equal disbursements which are paid out based on cumulative funds deployed.2

? Disbursements exceed $1.1 billion: As of September 30, 2014, $1,146,367,071 out of $1,457,591,353 or 79 percent of total allocated funds was disbursed to States. All 57 States received their first disbursement; 48 States received their second disbursement; and 24 States received their third disbursement.

? SSBCI funds deployed exceed $1 billion: Through September 30, 2014, States deployed a total of $1,003,975,220. Of this total, $943,285,735 was from original SSBCI allocations and $60,689,485 was from recycled3 SSBCI funds. These funds support loans or investments to small businesses, including to intermediaries, and for administrative expenses related to the program.

1 North Dakota and Wyoming did not apply for SSBCI funding, however, consortiums of municipalities in each state are participating. Alaska withdrew its application.

2 SSBCI funds deployed are those legally "expended, obligated, or transferred." For clarification, SSBCI funds "expended" are funds used to support loans or investments or for administrative expenses. SSBCI funds "obligated" are funds legally committed to support loans or investments, including obligations to intermediaries, and for administrative expenses. SSBCI funds "transferred" are funds transferred to a contracting entity as reimbursement of expenses incurred or to fund a loan or investment. Funds "expended, obligated, or transferred" includes obligations to venture capital funds not yet linked to specific small business investments.

As of 12/31/13, Venture Capital Programs reported that the amount of funds expended, obligated or transferred was 37% greater ($89.5 million) than the amount expended to small businesses. The variance was due to SSBCI dollars that were obligated for investment in a small business or to a fund but not yet expended to a specific small business.

3 When a loan or investment supported with SSBCI funds is repaid, the State may then recycle the funds into another round of loans or investments.

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? Recycled SSBCI funds4 exceed $60 million: Through September 30, 2014, thirteen States reported recycling $60,689,485 of their program dollars into new SSBCI-supported loans or investments.

? Funds deployed increased 9 percent in the third quarter of 2014: Total amount of funds deployed increased from $923 million to $1.04 billion.

SSBCI at Work: Featured Success Stories

Alabama: Helping Small Manufacturers Grow

When Bear & Son Cutlery Co. won a contract to manufacture hunting and other steel-blade knives for a major outdoor retail brand, it needed to expand its warehouse and shipping capacity. The partners created an affiliated company, M&J Shipping Supplies, to manage shipping and logistics, but because the company and contract were new, they found it difficult to obtain financing.

With a 50% guarantee from the Alabama Department of Economic and Community Affairs (ADECA), Cheaha Bank was able to lend $182,000 to M&J Shipping Supplies allowing the company to buy and renovate a building, hire 10 new employees, and start fulfilling the contract.

Indiana: Investing in Successful Start-Ups

Jada Beauty, founded by two women entrepreneurs, was Indiana's first direct investment of SSBCI dollars through Indiana Angel Network Fund ("Angel Fund"). The two founders, both first-time entrepreneurs, needed seed capital to hire technical talent and implement initial market-entry strategies. Angel Fund's initial $125,000 investment in February 2012, helped raise more than $300,000 private capital for the company. The investment also enabled the company to build a website capable of supporting online sales. In August 2013, the company was acquired by Sally Beauty Holdings, a publicly-traded company.

The founders and their 10 employees continue to grow the business under the new parent company in Indiana. Private investors and the Angel Fund generated sizable

4 "Recycled Funds" refers to the deployed funds (expended, obligated, or transferred) that came to the State in the form of program income, interest earned or principal repayments and deployed funds that have been previously loaned or invested.

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returns within 18 months of investment, making more seed and early-stage capital available to invest in future opportunities like Jada Beauty.

Nebraska: Making Plastic Greener

Laurel BioComposite developed a green alternative to petroleum-based plastic resins using a non-toxic byproduct of corn ethanol production. To move from theory to application, the company needed $5 million for equipment and temporary working capital but was unable to obtain adequate financing. Working with Security Bank, a community bank located in Laurel, Nebraska (pop. 964), the Nebraska Progress Loan Fund used SSBCI funds to make a $1 million companion loan that filled the financing gap. Laurel BioComposite now has the opportunity to prove their product and manufacturing technology with new buyers and licensees and bring manufacturing jobs to this rural community.

"We have learned that the process of taking an innovation from inception to commercial production takes the efforts and support of many people. Financial resources such as those provided by the Nebraska SSBCI are critically important..." Tim Bearnes, CEO, Laurel BioComposite.

New Mexico: Helping Non-Profits Serve the Community

In the city of Albuquerque, where over 17 percent of the population lives in poverty,5 there is a critical need for affordable housing. The Greater Albuquerque Habitat for Humanity (GAHH) wanted to move to a more prominent location to increase visibility throughout the community and expand operations. GAHH sought financing, but did not meet the bank's loan-to-value requirements.

Using SSBCI funds, New Mexico Finance Authority (NMFA) provided a $241,000 subordinate loan participation enabling Wells Fargo Bank to extend a $1.6 million loan to purchase and renovate the new GAHH headquarters and Habitat Restore.

5 United States Census Bureau, "State and County Quick Facts," Available at: . Accessed on 4 December, 2014.

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Figure 1.

$1,200,000,000 $1,100,000,000 $1,000,000,000

$900,000,000 $800,000,000 $700,000,000 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000

$0

Figure 2.

Disbursements of SSBCI

(cumulative through September 30, 2014)

3rd Disbursement 2nd Disbursement 1st Disbursement

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Figure 3.

$1,000,000,000 $900,000,000 $800,000,000 $700,000,000 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $0

SSBCI Funds Deployed

(Cumulative through September 30, 2014)

Recycled Funds Deployed Allocation Deployed

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