The U.S. will give out $10 billion in aid to new companies in an attempt to spur business in disadvantaged companies and broaden the recovery from the pandemic, The Wall Street Journal reported Saturday (Jan. 8).
The State Small Business Credit Initiative will get the funding to states, territories and tribal governments to help get venture capital out and guide private lenders to issue loans to small firms. The funding will come from the $1.9 trillion COVID-19 aid package from last March.
The program will revive a policy put in place after the 2007 recession, when banks had stopped lending as much. However, the new program for $10 billion is six times bigger than the last one.
According to Adair Morse, deputy assistant secretary of capital access at the Treasury Department, the goal is to get more money to disadvantaged groups, including racial minorities, rural communities and veterans.
President Joe Biden’s economic agenda has faced speed-bumps because of disagreements over how much needs to be spent on his spending plan for things like healthcare, education and climate change. Some Democratic allies also want the White House to show more work on addressing wealth and race inequality issues.
Meanwhile, Republicans have said a $10 billion program was not necessary because of previous pandemic aid to smaller businesses.
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The disbursement of the funds will likely begin in the first quarter this year, and states and other recipients will be able to use the funds as they see fit within the Treasury Department’s parameters.
Not all small businesses have weathered the pandemic so far — with the economy in flux, landlords have had to choose to offer breaks to retail tenants or just lose them altogether as some businesses close down.
In San Francisco, landlords have been dealing with more financial pressure because of the vacancy tax introduced, which hits landlords that have had a commercial space empty for over 182 days in a year.
Read more: Landlords Find New Ways to Fill Vacant Retail Space
