Initiative helps small businesses get loans

An initiative that makes millions of dollars in loans available to small businesses in Nevada was approved Wednesday, according to a joint announcement by Republican Gov. Brian Sandoval and the U.S. Department of the Treasury.

The State Small Business Credit Initiative supports state-level small-business lending programs and is part of the $30 billion Small Business Jobs Act signed by President Barack Obama in September 2010.

"Access to funding is a significant issue for many entrepreneurs seeking to grow," Sandoval said in a statement. "This funding will go a long way towards helping small businesses get off the ground and creating jobs for Nevadans."

Under the Small Business Jobs Act, Nevada can now access $13.8 million in SSBCI money.

The state expects to generate at least $10 in new private lending for every $1 in federal funding. As such, the $13.8 million allocation for Nevada is expected to support more than $138 million in new private lending.

The Nevada Commission on Economic Development will use this money to support the Nevada Microenterprise Initiative and a new Nevada Collateral Support Program.

The potential job growth has been estimated at 1,035 statewide, with an emphasis on manufacturing, utilities, construction and health services.

"These programs will allow the state to participate with financial institutions throughout the state to support additional lending activities for our Nevada Small Businesses," said Mike Skaggs, director of the Nevada Commission on Economic Development.

The commission launched the Nevada Collateral Support Program in July to provide the state with $13.3 million for direct use by business owners. The program aims to help borrowers who may lack collateral.

For example, if a borrower has $30,000 in collateral but needs $40,000, the program will loan the missing $10,000.

The Nevada Microenterprise Initiative is designed to support the development of small businesses with five or fewer employees, including the owner.

The initiative targets new businesses that require $35,000 or less in start-up capital.

"Anything that helps support business expansion and ultimately increase employment in our state will be a great benefit," Heritage Bank of Nevada President Stan Wilmoth said. "The collateral support piece of this funding will allow banks to refinance debt secured by assets with little or no equity at current market rates."

Generally, these public-private loans will have a targeted amount of $250,000.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.