Seeking to spur $15 billion in inner-city investment, President Clinton on Friday proposed expanding government loan guarantee and tax credit programs.
As part of the initiative, the Small Business Administration would let 10 more nonbank lenders join the 7(a) loan program, which guarantees up to 80% of a loan to a small business that is unable to find private financing. Currently, only 14 nonbank lenders are permitted.
The President also proposed a 25% tax credit for investments in community development banks and the creation of "America's Private Investment Companies," which would make equity investments in large companies that are expanding or relocating to inner-city and rural areas. They would be financed with $100 million in private capital and $200 million in government-loan guarantees.
Also on the agenda: lifting restrictions on Small Business Investment Corporations; establishing a new-markets venture capital fund; and expanding community development financial institutions.
The programs were outlined in a policy paper released by the White House. The President unveiled the plan at the second annual Wall Street Project investors conference, organized by civil rights leader Jesse Jackson.