US plans $10 billion in funding for COVID relief for SMEs
The United States will provide $10 billion in aid to new businesses in an effort to stimulate activity in disadvantaged businesses and broaden the recovery from the pandemic, The Wall Street Journal reported on Saturday (January 8th).
The State’s Small Business Lending Initiative will secure funding from states, territories and tribal governments to help secure venture capital and guide private lenders to lending to small businesses. The funding will come from last March’s $1.9 trillion COVID-19 relief package.
The program will revive a policy put in place after the 2007 recession, when banks stopped lending as much. However, the new $10 billion program is six times larger than the previous one.
According to Adair Morse, deputy assistant secretary for access to capital at the Treasury Department, the goal is to get more money for disadvantaged groups, including racial minorities, rural communities and veterans.
President Joe Biden’s economic agenda has faced setbacks due to disagreements over how much to spend on his spending plan on things like health care, education and climate change. Some Democratic allies also want the White House to show more work on issues of wealth and racial inequality.
Meanwhile, Republicans have said a $10 billion program isn’t needed because of previous pandemic relief for small businesses.
Disbursement of funds will likely begin in the first quarter of this year, and states and other recipients will be able to use the funds as they see fit within Treasury Department parameters.
Not all small businesses have weathered the pandemic so far – with the economy changing, landlords have had to choose whether to offer breaks to retail tenants or simply lose them altogether as some businesses are closing.
In San Francisco, landlords have faced increased financial pressure due to the introduction of the vacancy tax, which hits landlords who have had empty commercial space for more than 182 days a year.
Read more: Landlords are finding new ways to fill vacant retail space