The United States Government is planning on distributing $10 billion to small businesses in an attempt to help them gain access to much-needed capital and boost economic recovery following the Covid-19 pandemic.
The State Small Business Initiative will direct money to local governments that will provide venture capital or encourage private lenders to issue loans to small businesses; this is a revived strategy that was previously used during the 2007-2009 recession.
Congress intends to dictate where the funds go to ensure that racial minorities, rural communities, and veterans receive most of the funds. The Goal of the project is to ensure that it “does not leave people with good ideas and entrepreneurial energy behind because of where they want to start their business or the color of their skin or any other unacceptable barrier,” said Gene Sperling, a senior adviser to Mr. Biden.
The money will come from the $1.9 trillion coronavirus aid package passed last March and the Treasury Department expects the $10 billion worth of funds to be distributed in the first quarter of 2022.
Some Republicans have begun to speak out against the additional $10 billion in aid as they argue that over $1 trillion in federal funding has already been distributed to small businesses over the course of the pandemic.
Source: Wall Street Journal
