The State Small Business Credit Initiative (SSBCI) has approved four state plans for funding of up to $353.4 million, according to a Feb. 27 statement from the U.S. Department of the Treasury.
In their press release, the Treasury Department said it has officially approved state and territorial proposals for more than $7 billion in SSBCI financing to promote small businesses and entrepreneurship and increase access to capital under President Joe Biden’s American Recovery Plan.
Delaware received approval for up to $60.9 million, which will allow it to run multiple programs. Included in the plan is $27.5 million to be used for the loan participation program, $22.5 million for the Stage VC Program, and $7.5 million allocated for the Delaware Accelerator and Seed Capital Program.
Kentucky was approved for just over $117 million. The initiatives are implemented by the Kentucky Cabinet for Economic Development (KCED). The equity/venture capital programs will be managed by the Kentucky Science and Technology Corporation, with an emphasis on pre-seed and seed-stage capital investments.
KCED will manage the loan participation and collateral assistance programs through the Kentucky Economic Development Financing Authority. The state will also use funds to conduct outreach in low-to-moderate income communities throughout the state and to women-, veteran-, and minority-owned businesses, as well as businesses owned by people with disabilities or with limited English proficiency.
Tennessee will be granted up to $116.9 million and run four programs—a loan participation program and three venture capital programs. Included is a collaboration with LaunchTN to use $70 million for the equity program, which included a fund-of-funds approach to investing in up-and-coming venture capital fund managers and direct investments in early-stage firms.
The state of Wyoming will run two equity/venture capital programs with funding of up to $58.4 million. Just over $23 million in funds will offer restricted partnership investments in seed/early-stage venture capital funds based in Wyoming. The $35 million direct initiative will offer equity co-investments in state-based technology startups in their Series A or development stage. These initiatives will provide local business owners access to venture capital investments.
“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 Yellen. “These SSBCI funds will promote equitable economic growth across the country.”
A Treasury Department official told The Epoch Times they will “continue approving additional state plans.”
The SSBCI was renewed and enlarged under President Joe Biden’s American Rescue Plan, enabling it to improve on its prior model by giving roughly $10 billion to state and local governments. In an effort to encourage entrepreneurship, the initiative has provided access to money.
The Treasury press release stated that their program is targeting “underserved communities” believed to be struggling following the economic downturn seen during the COVID-19 pandemic.
The SSBCI, was founded in 2010 with the mission of creating access to financing for entrepreneurs and small enterprises. The group has, thus far, allocated $2.5 billion in financial assistance and incentives for businesses with low representation.