The US Treasury Department has announced it has approved additional support for underserved small business owners in nine states through the State Small Business Credit Initiative (SSBCI). The Treasury Department had earmarked more than $10 billion in funding to foster the growth of small businesses in the US.
Nine other states approved for SSBCI funding
In this round, the states of Arizona, Connecticut, Indiana, Maine, New Hampshire, Pennsylvania, South Carolina, South Dakota and Vermont have been awarded $940 million as part of SSBCI.
The US bailout plan had re-approved and expanded SSBCI, which was originally established in 2010. At the time, it helped increase access to capital for traditionally disadvantaged small businesses and entrepreneurs. As part of this re-authorization, SSBCI is allocating $10 billion in funding to states in the United States.
How will small businesses in these states benefit?
These latest Treasury Department funds now stand at more than $1.5 billion in 14 states. In total, the nine states will receive approximately $940 million in small business equity funds. In their application for the SSBCI program, the states plan to target key industries and small businesses seeking access to capital. Some of the major programs that the Treasury has approved for these states include:Arizona will receive up to $111.0 million to execute three different programs, including two venture capital programs, to which the state has allocated $87 million, and a loan guarantee program. The venture capital programs will invest in early stage and Series A focused venture funds and early stage technology startups. Connecticut has been awarded up to $119.4 million to run two different programs and will launch two major new initiatives. The Connecticut Future Fund and the ClimateTech (CT) Fund. Indiana has been approved up to $99.1 million to run two different programs, including a venture capital program to which it has committed more than $70 million. Maine was approved for $62.2 million to fund four different programs, including two venture capital programs to which it has allocated $20 million. New Hampshire is approved for up to $61.5 million. It will run five different programs, including a loan participation program to which it has allocated $40 million. Pennsylvania is approved for up to $267.8 million. It will run three different programs, including an equity investment program and a venture capital investment program, to which it has allocated a total of $142 million. South Carolina is approved for up to $101.3 million. It will run a loan participation program to which it has allocated $50 million and a venture capital program to which it has allocated $51 million. South Dakota is approved for up to $60.0 million. It will run one loan participation program, to which it has committed its entire $60 million, to provide accompanying loans for financing by financial institutions such as banks and CDFIs. Vermont is approved for up to $57.9 million. It will run three different programs, including two venture capital programs to which it has allocated nearly $29 million.
More SSBCI funding available to drive small business success and job creation
This is the second financing round. In May, the initiative provided funding to Hawaii, Kansas, Maryland, Michigan and West Virginia. SSBCI funding is expected to catalyze up to $10 in private investment for every $1 in SSBCI equity funding, amplifying the effects of this funding and giving small business owners the resources they need to grow and prosper sustainably .
State governments had submitted plans to the Treasury for how they will use their SSBCI allocation to provide financing to small businesses. This includes venture capital programs, loan participation programs, loan guarantee programs, collateral support programs and access to capital programs.
“This is a historic investment in entrepreneurship, small business growth and innovation through the American Rescue Plan, which will help reduce barriers to access to capital for traditionally disadvantaged communities,” said Janet L. Yellen, Secretary of the Treasury.
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