Thursday, May 7, 2009

GOV. RITTER SIGNS 'ACCESS TO CAPITAL' BUSINESS BILL


 

Gov. Bill Ritter today signed into law another major piece of his 2009 economic-development package at the Denver Metro Chamber of Commerce annual "State of the State" luncheon. Senate Bill 67 will give small businesses direct access to credit and capital to help them through this tough economy.

 

The bipartisan measure, sponsored by Sen. Rollie Heath and Reps. Sara Gagliardi and Don Marostica, revives and strengthens the Colorado Credit Reserve Program, which will help banks make loans to small businesses. By committing $2.5 million in public funds, the program will leverage more than $50 million in private bank loans, helping businesses retain and create jobs and breathe life into local communities. 

 

"Our 2009 Economic Development Package is a key part of our overall strategy to position Colorado for a strong recovery," Gov. Ritter said. "Small businesses are the backbone of Colorado's economy. That's why we have spent the last two years cutting taxes for small businesses and expanding our rural incentive programs. Today, we are taking that a step further by providing businesses with what they need most: capital. This program will help lead Colorado forward by stimulating the flow of credit statewide."

 

The Colorado Credit Reserve Program fell dormant in 2006 due to a lack of funding after a 10-year run. During that period, $850,000 in public funds were used to leverage more than $24 million in private-sector bank loans to nearly 500 Colorado businesses. The revived program will be operated by the Colorado Housing and Finance Authority.

 

In addition to CHFA, numerous organizations supported and advocated for the legislation, including the National Federation of Independent Businesses, Colorado Bankers Association and Independent Bankers of Colorado.

 

"Now is the time when small businesses need support," Sen. Heath said. "With the economic downturn, we need to encourage job retention, and we can do that by encouraging new loans for worthy businesses. This is exactly the tool small businesses need to sustain and grow jobs."

 

"Over the last year, we've seen many small businesses struggle to keep their doors open because they can't borrow the money they need to pay the bills," Rep. Gagliardi said. "This legislation shows our confidence in our banks and our businesses. It shows that even in this difficult economy, we believe our small businesses are competitive and have what it takes to thrive."

 

"This new law will allow small businesses in Colorado, when they need it most, to borrow money with state security," Rep. Marostica said. "We have done this twice before in the state and it worked very well. This will help Colorado to come out of the recession sooner."

 

Gov. Ritter signed two other key pieces of his business package on Monday: HB 1001 and SB 171. 

Colorado Credit Reserve Program Fact Sheet

 

·         The Colorado Credit Reserve program (CCR) is designed to assist businesses in meeting their capital needs by working directly with their local banking partner.

·         The program works by establishing a pooled loan-loss reserve fund that banks may access to recover losses associated with loans registered in the program.

·         CCR is modeled after 20 similar programs in operation throughout the U.S.

·         Colorado Housing and Finance Authority previously administered the CCR program in Colorado between 1996 and 2006, helping over 500 businesses retain or sustain 2,700 jobs.

·         Seventy percent of the businesses helped through the CCR program between 1996 and 2006 were women or minority-owned businesses.

·         CCR has an in-state success rate of leveraging $28 in private sector lending for every $1 of public investment.

·         The program ended in 2006 due to lack of funding.

·         The CCR program has received $2.5 million in renewed funding through SB09-67, which was signed into law by Gov. Bill Ritter on May 7, 2009.

·         CHFA estimates the $2.5 million will leverage $50 million in private sector funds investment.

·         CHFA will begin marketing the CCR program to the Colorado banking community immediately, and anticipates enrolling loans in the program as early as June 2009.

·         Visit www.chfainfo.com to learn more about the CCR program, or call our Denver office at 1.800.877.2432 or West Slope office at 1.800.877.8450 for more information.