An Assembly committee this week gave unanimous approval to a California Chamber of Commerce-supported job creator bill expanding loan access for small businesses.
SB 936 (Hertzberg; D-Van Nuys) encourages creation of small businesses by expanding their access to loans, which helps them grow.
The bill expands the availability of loans through the Infrastructure and Economic Development Bank’s (IBank) California Small Business Loan Guarantee Program.
The program helps businesses create and retain jobs. The bill promotes statewide economic development by supporting loans to small businesses that would not otherwise qualify.
Small businesses establish a favorable credit history with a lender under this program and then are able to obtain future loans on their own. The program has been in place since 1968 with almost no defaults.
SB 936 increases the IBank’s ability to leverage state and federal funding, thus incentivizing private lending and economic investments. The loan guarantee program uses state and federal funding to create a loan loss reserve, which reduces the risk of lending to small businesses.
The IBank, housed within the Governor’s Office of Business and Economic Development, was established in 1994 to promote economic revitalization, enable future development and encourage a healthy jobs climate in the state.
Since its creation, IBank has loaned, financed or participated in more than $34 billion in infrastructure and economic expansion projects.
Small businesses in California employ about half of the state’s private workforce, according to the U.S. Census Bureau. Moreover, businesses with fewer than 20 employees have accounted for significant net employment growth, based on studies by the Census Bureau and the Kauffman Foundation.