On Friday, the U.S. Treasury Department announced plans to roll out a third round of funding from the State Small Business Credit Initiative (SSBCI) to Colorado, Montana, New York and Oregon. A total of four states have been approved for up to $751 million in assistance.
The SSBCI is a small business assistance program that has been in place since 2010, but was replenished in March 2021 thanks to the $1.9 trillion American Bailout Plan that President Joe Biden signed into law.
The $10 billion funding program aims to increase access to capital for underserved communities. The SSBCI funds are not distributed directly to companies, but to lenders. Eligible small businesses and startups, generally defined as companies with 500 or fewer employees, can seek loans or investments as they normally would through their bank, a community lender or an equity investor.
The news follows an earlier release of funds in May in five states, Hawaii, Kansas, Maryland, Michigan and West Virginia. The $500,000 in aid.
The Treasury Department approved another $1.5 billion in July after nine state plans from Arizona, Connecticut, Indiana, Maine, New Hampshire, Pennsylvania, South Carolina, South Dakota and Vermont were approved. The agency has announced more than $2.25 billion in funding to date, or nearly a quarter of the $10 billion program.
Treasury estimates that the program could generate $10 in private investment for every dollar of federal funding.
There is a set of resources available to businesses through SSBCI that include venture capital, access to capital, collateral support, loan participation and loan guarantee programs. Earlier, state governments submitted their individual plans to the Treasury Department outlining how they would distribute funds to small businesses.
Montana, for its part, says it will administer the loan participation program with its funding and plans to expand opportunities for the state’s rural and Native American entrepreneurs. Colorado plans to oversee three different programs targeting small businesses and specifically allocate $10 million of its SSBCI allocation to help businesses recover from the pandemic. Colorado Governor Jared Polis praised the announcement in a Friday press release, saying the funding would help support more than 11,000 jobs in the state.
Echoing that praise was U.S. Treasury Secretary Janet Yellen. The Treasury secretary “This is a historic investment in entrepreneurship, small business growth and innovation as part of the American bailout plan that will help reduce barriers to access to capital for traditionally underserved communities, including those in rural areas,” Yellen said in a Friday statement.
The roadmap for future waiting lists and the amount of aid is unclear. Details are expected to be revealed as funding is approved.