Territory’s app for SSBCI funds still under review
As of late last year, the U.S. Treasury Department was still reviewing American Samoa’s application seeking more than $10 million under the federal State Small Business Credit Initiative (SSBCI), which was created under the Small Business Jobs Act of 2010 in response to concerns that small businesses have been unable to access capital that would allow them to create jobs.
Among other things, the act aims to stimulate job growth by establishing the $1.5 billion SSCI within the U.S. Treasury to strengthen state and territory (state) programs that support lending to small businesses and small manufacturers, said U.S. Treasury.
Participating states are expected to leverage the SSBCI funds to generate an amount of private financing and investment at least 10 times the amount of their SSBCI funds (that is, a leverage ratio of 10:1), according to a 47-page U.S. Government Accountability Office report last month, evaluating the SSBCI.
Congressman Faleomavaega Eni announced in late 2010 that more than $13 million is available to establish a lending program to help small businesses in the Territory access new credit lines and obtain loans under the SSBCI.
Last year the government successfully submitted its application prior to the Jun. 27, 2011 deadline.
GAO, in a report released last month about the SSBIC program, says that officials from American Samoa indicated that they initially requested $10,380,008 in their SSBCI application, though the territory was allocated the minimum SSBCI amount of $13,168,350.
“According to [U.S] Treasury officials, American Samoa’s request had increased to $10,418,500 during the review process. Treasury officials noted that they encouraged states [and territories] to apply for the full amount of their allocation, for which they could reasonably demonstrate all of the program’s eligibility criteria. As of Oct. 31, 2011, American Samoa’s application was still under review,” said GAO.
According to the U.S. Treasury, 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.
Additionally, the program will allow states to build on successful models for state small business programs, including collateral support programs, Capital Access Programs (CAPs) and loan guarantee programs. Existing and new state programs are eligible for support under this new program.
The GAO report says American Samoa plans to allocate $1.29 million for the CAPs and $2.90 million for the collateral support programs.
The Chamber of Commerce came out in full support of this federal program, informing the governor in November 2010, that small businesses would like more loan opportunities.
“If given the opportunity, the private sector will make full use of the program by borrowing for expansion and improvement. This means jobs for the people and a fortified tax base for our civil servants,” said then Chamber chairman Joey Cummings in a letter to the governor.
As of yesterday, U.S. Treasury online records do not indicate that American Samoa’s application has been approved yet.
Unknown at this time, is who will be administering the program if the application is approved. Samoa News has not been able to obtain a copy of the full application, but understands that it will be a department within the Executive Branch of the government.