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DCA summarizes state-run small-business loan guarantees and participation programs
Summary
DCA said Georgia deployed roughly $50 million under the State Small Business Credit Initiative and now operates loan guarantee and loan participation programs to expand bank lending; Haywood said DCA had guaranteed or lent more than $60 million and leveraged about $350 million.
Rusty Haywood reviewed the State Small Business Credit Initiative (SSBCI) history and current loan programs. He said Georgia received about $50 million under the SSBCI and that after deployment and release from Treasury oversight the state retained programs to guarantee loans and participate in them to improve access to capital for small businesses.
Haywood described two programs: a loan guarantee program that can guarantee up to 50% of a loan up to $400,000, and a loan participation program where the state participates up to 25% of a loan up to $250,000. "We've loaned out or guaranteed somewhere north of $60,000,000 as funds have come back in and recycled through, leveraged probably about $350,000,000 through the process," Haywood said. He added that banks underwrite loans and that DCA's in-house credit team reviews applications and that default rates have remained low.
Committee members asked about safeguards, eligible activities, working capital constraints, and whether funds were prioritized for rural applicants; Haywood said the majority of loans have gone to rural Georgia but the programs are statewide and that farmer applicants have been served in some cases. He also said the state's role is subordinated to banks and that bank underwriting standards remain central.
