In 2021, Americans applied to start 5.4 million new businesses, more than 20 percent higher than any previous year on record, according to a recently released White House report.
In addition, the Biden Administration analysis found that smaller firms created more U.S. jobs than ever before. Businesses with fewer than 50 workers accounted for 1.9 million jobs in the first three quarters of 2021, the highest rate of small business job creation ever recorded in a single year.
To keep the entrepreneurial trend going, the Treasury Department awarded the latest round of State Small Business Credit Initiative (SSBCI) money. SSBCI was first established in 2010. It was reauthorized and expanded in March 2021 as part of the American Rescue Plan Act (ARPA).
The newly-reauthorized small business program has nearly $10 billion in Uncle Sam tax dollars for states, as well as the District of Columbia, U.S. territories, and Tribal governments, that develop programs promoting entrepreneurship, especially in traditionally underserved communities.
In May, more than $639 million in SSBCI money went to Hawaii, Kansas, Maryland, Michigan, and West Virginia.
Now another $940.2 million of the initiative's funds are heading to nine more states — Arizona, Connecticut, Indiana, Maine, New Hampshire, Pennsylvania, South Carolina, South Dakota, and Vermont.
Below are the highlights of the plans from the nine states receiving the latest round of SSBCI funding.
Arizona was approved for up to $111.0 million to operate three different programs. Two are venture capital programs, to which the Grand Canyon State has allocated $87 million, with the third being a loan guarantee program. All three programs will focus on underserved businesses, with a goal of expanding access to capital for such operations.
Connecticut, approved for up to $119.4 million, will operate two different programs and launch two major new initiatives. The Connecticut Future Fund will support Nutmeg State entrepreneurs from underserved and diverse backgrounds who lead small businesses in a variety of sectors. The ClimateTech (CT) Fund will support early-stage businesses with a focus on clean energy, environmentally safe manufacturing, and climate resiliency.
Indiana was approved for up to $99.1 million to operate two different programs. One is a venture capital program targeting seed- to early-stage investments started by underserved founders in Indiana. The Hoosier State also will use the federal money to launch a loan fund investment program to catalyze local capital and increase the amount of available funding to underserved entrepreneurs and business owners.
Maine will operate four different programs with the SSBCI-approved $62.2 million. It will go toward two venture capital programs, which generally target startups with fewer than 10 employees. The Pine Tree State programs also will leverage other initiatives to generate awareness and access with minority- or women-owned or rural small businesses. In addition, part of the funds will go to a loan participation program focusing on key state sectors, such as forestry and agriculture, sustainable use of ocean resources, tourism, and diverse technology.
New Hampshire, approved for up to $61.5 million, will operate five different programs, including a loan participation program. The Granite State program will support loans from community banks that serve rural and other underserved areas of the state. The New Hampshire Business Finance Authority to administer the program.
Pennsylvania plans to use its $267.8 million to operate three different programs, including an equity capital investments program and a venture capital investments program. The programs will provide direct equity investments in seed and early-stage technology companies, as well as venture capital investments in new funds. The Keystone State's third planned use of the funds is a loan participation program for small business borrowers through certified economic development organizations (CEDOs) and community development financial institutions (CDFIs).
South Carolina was approved for up to $101.3 million. The Palmetto State will use the money to operate a loan participation program for underserved communities. The state also will spend part of the funds for a venture capital program that will target underserved businesses and rural areas of South Carolina.
South Dakota plans to use its $60 to operate a loan participation program. The program will provide companion loans to financing provided by financial institutions such as banks and CDFIs. Mount Rushmore State officials say they will use data to identify underserved markets and coordinate with partners on outreach and awareness of the loans for businesses in previously overlooked communities.
Vermont's $57.9 million will help operate three different programs. Two are venture capital programs focusing on seed fund investments; investments leveraging accelerator programs to make small investments in rural, pre-seed stage companies; and investments in high-growth, technology innovation companies in the healthcare sector. The Green Mountain State's third SSBCI fund target is a loan participation program, with operations that address climate change as one of its targets.
"This is an historic investment in entrepreneurship, small business growth, and innovation through the American Rescue Plan that will help reduce barriers to capital access for traditionally underserved communities," said Secretary of the Treasury Janet L. Yellen in announcing the latest state recipients. "I'm excited to see how SSBCI funds will promote equitable economic growth across the country."
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