The U.S. Treasury Department just approved $940.2 million in small business financing to nine states as part of the $10 billion State Small Business Credit Initiative (SSBCI). If your small business operates in the states of Arizona, Connecticut, Indiana, Maine, New Hampshire, Pennsylvania, South Carolina, South Dakota, or Vermont, you should check with your local small business lenders, venture capital firms, and your state government to see if are you eligible to apply for funding.
In late May 2022, the U.S. Treasury Department released the much-discussed first installment of the federal government’s SSBCI. – a program worth 10 billion dollars included in 2.1 trillion The Saving America Plan Act of 2021 which distributes money to state, territory, and tribal governments to provide venture capital to small businesses and encourage private lending to them.
Here’s how much money was approved for each state and what they plan to do with it.
- Arizona was approved for up to $111 million and will use $87 million of those funds to manage two state venture capital programs that will focus on Series A financing for technology startups in underserved markets. An additional $24 million will be used to guarantee loans to small businesses in underserved communities.
- Connecticut will use the $119.4 million that was approved to fund its new Connecticut Future Fund, which will provide funding to underserved and diverse entrepreneurs, and the ClimateTech (CT) Fund, which will support green startups energy. safe production and climate resilience.
- Indiana will fund two different programs with $99.1 million approved: a venture capital program with more than $70 million committed. The program will provide between $500,000 and $5 million in equity capital to Indiana startups, with a portion of those funds going toward investing in companies created by underserved founders. The state will use the remaining $29.1 million to finance the loan fund’s investment program aimed at increasing financing, including low-interest loans, to entrepreneurs and business owners.
- Maine plans to use the approved $62.2 million to fund two $20 million venture capital programs; a $22 million loan participation program targeting Govt 10-year plan for the development of the national economyand $20 million in loan guarantees for local small business lenders.
- New Hampshire will spend $61.5 million that was earmarked for the Loan Participation Program, which will support small business loans from community banks in rural and other underserved areas of the state. The program will be administered by the New Hampshire Office of Business Finance.
- Pennsylvania will use the $267.8 million that was approved to fund equity investments and venture capital programs for which it has committed a total of $142 million. The programs will provide equity investments to early-stage technology companies in partnership with venture capital firms Ben Franklin Technology Partners and Life Sciences Greenhouses. The state will also use some of these funds for venture capital investments in new funds managed by underserved venture capital firms. In addition, it will fund a $125 million loan participation program that will provide loans of up to 50% of total financing to small business borrowers through Certified Economic Development Organizations (CEDOs) and Community Development Financial Institutions ( CDFI).
- South Carolina was approved for up to $101.3 million and will use $51 million to fund the Small Business Loan Participation Program, part of which will be designated by Community Development Financial Institutions (CDFIs) and the remainder will go to the venture capital program to finance startups in settlements with insufficient number of services. and rural areas of the state.
- South Dakota will use $60 million that has been set aside to fund a loan participation program that will be managed by local banks and CDFIs. The program expands access to capital for underserved communities by using data to identify underserved markets and relying on partners to conduct outreach and raise awareness.
- Vermont will use $29 million of the $57.9 million that has been committed to two venture capital programs that will provide investments in a seed fund, investments in accelerator programs for small investments in rural seed-stage companies, and investments in technological innovations a high-growth company in the healthcare sector. The remainder will be used to fund a participating loan program to help small businesses grow, hire and serve underserved markets, and address climate change initiatives.
Keep checking back
The US Treasury Department still has more than $7 billion available to states for small business funding initiatives over the next two years, but you should check with your state carefully to see if it has been approved for funding. Always inquire about financing from local lenders and your state’s Small Business Administration, and keep an eye out for press releases from your state’s governor’s office to see if your business is eligible for potential financing.