Legislation that would create a state loan fund of up to $100 million for small businesses in Ohio has passed the House of Representatives.
The bill is intended to help keep small businesses afloat during tough economic times when companies may have difficulty in accessing capital, its sponsors said. The bill’s sponsors are Rep. Jay Goyal, D-Mansfield, and Nancy Garland, D-New Albany.
Here’s how the law would work, according to a statement from Garland and Goyal: Using a line of credit from a participating bank and the state, an investment firm will loan money to eligible businesses. In order to be eligible for the loans, the small businesses must prove they will be able to create or retain existing jobs with the money. The state’s investment principal would not be at risk and no general revenue funds would be used. The bill authorizes the state to forego interest on its investment with the bank so that it can be used as a reserve to protect the bank against early losses.
Companies with sales less than $50 million would be eligible under the program, which would be administered by the Ohio Department of Development. It would be up to ODOD to establish the criteria for qualifying for a loan under the program.
The bill moves to the Senate after passing the House with a 87-11 margin.
