New Program Stimulates Opportunities for Minority Business Enterprises

BOWIE, MD (March 20) – Lt. Governor Anthony Brown announced today that minority business owners will have greater access to affordable working capital through a new program that encourages participating banks to make greater investments in the communities they serve.

Lt. Governor Brown said certified Minority Business Enterprises can borrow up to $1 million at a two percent discount through Maryland’s new Linked Deposit program. Minority-owned firms can use the money just as they would a conventional capital loan - to expand their businesses, add employees or invest in the latest technology.

“Minority owned businesses play an important role in revitalizing our communities, creating jobs and helping our economy to grow,” Lt. Governor Brown said during a press conference at the Center for Learning and Technology at Bowie State University. “Maryland’s Linked Deposit program, modeled after similar efforts being adopted by states across the country, will help Minority Business Enterprises get the working capital they need to innovate and grow.”

“Linked Deposit couldn’t come at a better time,” added Special Secretary Luwanda Jenkins, of the Governor’s Office of Minority Affairs. “With the downturn in the economy, small and minority-owned firms face even more difficulties in obtaining working capital. This is another example of why Maryland is a national leader in the area of minority business enterprise.”

Here’s how the program works:

• MBEs will be able to receive a two percent discount on loans up to $1 million from participating banks working with the Department of Housing and Community Development.
• The money may be used for capital development – for example, to hire new employees, expand facilities, or invest in new equipment – the same as any other capital loan.
• The bank underwrites the requested loan according to its usual underwriting standards, but with an interest rate that is two percent less than the rate they would charge for a loan of similar purpose and term.
• The Maryland State Treasurer’s office guarantees the loan by purchasing a certificate of deposit equal to the amount of the loan from the bank that issued the loan. The Treasurer accepts an interest rate on the certificate of deposit that is two percent less than current market rates.