With small businesses continuing to face challenges brought on by the pandemic, the U.S. Department of Treasury has expanded the State Small Business Credit Initiative (SSBCI) Program as a part of The American Rescue Plan Act of 2021. This program will provide a combined $10 billion for small business credit support and investment programs to:
- The states
- U.S. territories
- The District of Columbia
The SSBCI will also help fund programs run by Tribal governments. This program will build upon the $416.3 billion in emergency relief aid that the United States Small Business Administration (SBA) gave to over six million businesses in 2021.
In order for the SSBCI program to be successful, each state will need to apply for funding. They’ll also need to set their own rules/guidelines for small business owners once they receive funding.
To learn more, read through the sections below.
1. The SSBCI is focusing on equality
The rising cost of goods and supply chain backups are just some of the hurdles small businesses owners have had to overcome in recent years. The SSBCI’s goal is to help expand capital for small businesses across the U.S. and improve the access to startup capital, especially in underserved communities.
To accomplish this goal, the U.S. Department of Treasury will provide $1.5 billion to small businesses that are owned by individuals that face barriers to accessing capital. This includes those that are subject to racial and ethnic prejudice or cultural bias within the U.S.
This allocation will also help support small businesses that are in low income and high-poverty geographics, including minority-owned businesses. On top of this, the SSBCI will provide over $600 million to Tribes in the U.S. and $500 million to businesses with fewer than 10 employees
2. The SSBCI is expected to create more jobs
By increasing capital for small businesses through the SSBCI, the U.S. Treasury is also aiming to see an increase in job creation. Small businesses that have the working capital to hire employees are better able to stay competitive and innovative in their market. The SSBCI will also help small businesses retain their existing employees and consistently make payroll.
3. The SSBCI will support a variety of programs that increase the access to capital for small businesses
To receive the benefits of the SSBCI, your state, U.S. territory or Tribal government will need to apply. They’ll need to explain how their programs will lead to economic growth and job creation. Some of the programs the SSBCI funds will support include:
- Venture capital programs
- Loan participation programs
- Loan guarantee programs
- Collateral support programs
- Capital access programs (CAPs)
As small businesses continue to find new ways to innovate, evolve and overcome the obstacles the pandemic throws their way, the U.S. Department of Treasury is looking to help. The SSBCI will help fund programs across the U.S. that can raise capital for small businesses and startups, especially minority owned operations.
For more information on your state’s requirements, please visit the U.S. Department of Treasury’s State Small Business Credit Initiative (SSBCI) page.
If your business does not qualify for the SSBCI program, there are other options you can use for financing like Lendio*.
*Sponsored by Lendio