By Sara Jerome,

@sarmje

A giant utility near Washington, DC, is rolling out a new financial program focused on making loans available to local businesses.

Under the program, the Washington Suburban Sanitary Commission (WSSC) will deposit millions “in federally insured Washington-area banks in exchange for a commitment to offer ... new loans to small businesses in suburban Maryland,” The Washington Post reported.

“The program’s sponsors see it as a rare public stimulus program that creates jobs locally without spending taxpayer dollars: Having the extra dollars on the books gives local banks more capital to lend against, and WSSC eventually gets its money back with interest,” the Post reported.

The specifics, per the utility: “WSSC will deposit $12 million to participating community banks that will leverage those deposits 2:1, creating $24 million in available funding for loans to local businesses.”

WSSC, which provides water and wastewater services for customers near Washington, D.C., is one of the largest water utilities in the nation. It manages a network of nearly 5,600 miles of fresh water pipeline and over 5,400 miles of sewer pipeline, according to the utility.

WSSC’s financial program is known as Business Investment and Growth (BIG).

“BIG is another example of WSSC’s commitment to the economic development of the communities that we serve. These local investments help to generate jobs and provide WSSC with a competitive rate of return on its deposits. The program adds another dimension to WSSC’s role as an economic engine in the region,” according to WSSC.

BIG is based on county programs in Maryland, operating for the past five years, “in which taxpayer dollars are held by local banks in exchange for meeting certain small-business lending targets. There are no fines if a bank falls short, but the local governments could choose to cash out if they are not satisfied with the banks’ record,” the Post reported.

EagleBank is among the participants in the program, according to a statement from the bank.

"We are delighted to have the opportunity to partner with the WSSC and to support their efforts to work with local small and minority owned businesses," said Ronald Paul, the chairman and CEO of the bank. "By participating in the BIG program, EagleBank is able to increase and enhance our relationships with small and mid-size businesses that are contributing to job growth and business expansion across Montgomery and Prince George's Counties.”

To read more about how financial planning at utilities visit Water Online’s Funding Solutions Center.