Colorado, Oregon, New York, and Montana are the latest states selected for State Small Business Credit Initiative funds.
Small businesses revitalization is a key component of the U.S. economy's recovery from the COVID-19 pandemic. To help that sector's efforts, Uncle Sam continues to provide financial support.
Some of the federal money comes from the State Small Business Credit Initiative (SSBCI), which was first established in 2010. The SSBCI 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 federal funds 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.
More than $639 million in SSBCI money went to Hawaii, Kansas, Maryland, Michigan, and West Virginia in May.
In July, another $940.2 million of the initiative's funds went to programs in Arizona, Connecticut, Indiana, Maine, New Hampshire, Pennsylvania, South Carolina, South Dakota, and Vermont.
Today, the Treasury Department announced Colorado, Oregon, New York, and Montana are approved for $750 million to support investments in small business within their borders.
Below are the highlights of the plans from the four states receiving the latest round of SSBCI funding.
- Colorado is approved for up to $104.7 million for three programs. One is a venture capital program, to which $60 million is allocated, to invest in two venture capital funds per year for three years to build a diverse seed-stage portfolio of small businesses in need of capital. Another $35 million will go to an existing cash collateral support program that enables small businesses and non-profit organizations to secure credit by pledging a cash deposit as collateral. In addition, the Centennial State has set aside $10 million for a loan program intended to help Main Street businesses recover from the pandemic.
- Montana will use its $61.3 million in federal funds to operate a loan participation program, which is modeled after a successful program in the previous iteration of SSBCI. This new program is designed to significantly increase the number of eligible community development financial institution (CDFI) and non-profit local economic development agencies with revolving loan funds that can participate in the program. This should give it a much broader outreach for targeting underserved markets. In addition, this program gives rural and Native American entrepreneurs greater opportunity to create new businesses and expand existing small businesses and jobs in the Treasure State's rural counties and Indian Country.
- New York is approved for up to $501.5 million, which will go toward capital access, loan guarantee, loan participation, and venture capital programs. One example in the Empire State is a program, which will receive $154 million of the funds, that provides equity support to small businesses by investing through private venture capital funds and accelerator funds. In addition, New York has allocated funds to two programs designed to help small and underserved businesses compete for government contracts, which may include projects funded by the Bipartisan Infrastructure Law. As part of these efforts, New York plans to expand an existing program where the bulk of its potential contractor support went to minority- and women-owned businesses.
- Oregon plans to operate five programs with the $83.5 million in SSBCI funds coming its way. Around $30 million is allocated to two venture capital programs designed to invest in funds so they can launch and scale, enabling them to make co-investments in companies alongside private investors. Across its programs, the Beaver State's plan will provide access to capital in persistently underserved, low- and moderate-income areas and rural communities.
"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 Treasury Secretary Janet L. Yellen. "I’m excited to see how SSBCI funds will promote equitable economic growth across the country."
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