Did you know that a federal small business credit initiative is once again available to local entrepreneurs? The State Small Business Credit Initiative (SSBCI) Program, administered by the U.S. Department of the Treasury, was reauthorized as part of the American Rescue Plan Act of March 2021. It was originally introduced in 2010, following the Great Recession of 2008-2009.
The program provides a combined $10 billion to states, territories, the District of Columbia and Tribal governments to help small businesses continue to recover from the pandemic, create new jobs and foster entrepreneurship. Pennsylvania’s share came to just under $247 million. The program offers current small businesses and startups with funding for credit and investment programs, as well as technical support to small businesses applying for SSBCI financing and other small business government programs.
In September 2022, the Pennsylvania Department of Community and Economic Development announced that local economic development partners will help distribute the commonwealth’s SSBCI funding, and federal funds will be matched by local dollars. A list of program administrators in PA by county can be found here.
Programs available under State Small Business Credit Initiative
All recipient areas of the funding will be able to offer several different programs aimed at providing access to capital to qualifying parties. However, not every program is available in every area. These programs include:
- Venture capital programs: Recipients can establish public-private partnerships for equity investing or to invest in venture capital funds. These investments will serve as a way to provide funding to underserved startups and diverse founders.
- Loan participation programs: Through these programs, states can purchase an interest in the loans of lenders or directly lend alongside private lenders to finance small businesses.
- Loan guarantee programs: In this program, states use the provided funds to give an assurance to lenders that would be partially repaid in the case of default. The lender must make every reasonable effort to collect. This program is designed to help small businesses obtain loans that otherwise wouldn’t have been accessible.
- Collateral support programs: This program sets aside funding as collateral for new loans, which will enable start-ups to borrow funds that will allow their businesses to grow.
- Capital access programs (CAPs): Portfolio insurance is provided in the form of a loan loss reserve fund, to which both the lender and borrower contribute. This fund is supplemented with capital from the SSBCI.
The U.S. Treasury is especially focused on using the initiative to expand opportunities in underserved communities that don’t have access to funding. A portion of the money is allocated to business enterprises owned and operated by socially and economically disadvantaged individuals.
Use this site to search for SSBCI administrators by Pennsylvania county.
RKL’s team of small business advisors can help you determine your eligibility for this program. Reach out to your RKL professional or start a conversation using the form below.