NEW ORLEANS (AP) — Louisiana could get up to $13.2 million to encourage lending to small businesses under a new federal law creating a nationwide $30 billion fund, the U.S. Treasury Department says.
The fund is part of a bill to aid small businesses and encourage hiring signed by President Barack Obama on Sept. 27.
Under the new State Small Business Credit Initiative, states can apply for funds for programs that encourage private lenders — primarily community banks — to extend credit to small businesses. State have to demonstrate that each dollar in federal funds will translate into $10 of new private lending.
At its full capacity, Louisiana’s share would translate into $131.7 million in new lending, the Treasury Department said. The agency will have to approve any plan filed by the state.
Neighboring Mississippi is eligible for the same amount of funding. The Treasury Department doled out the allocations on a formula based upon each state’s unemployment rate and the decline in jobs.
Besides creating the fund, the law includes about $12 billion in tax breaks for small businesses that take effect Monday. For example, one provision increases to $500,000 the amount of investments that businesses would be allowed to write off this year and next.
The law also expands current loan programs handled by the federal Small Business Administration.
