Treasury announces approval of $801.4 million SSBCI funding for 11 states and territories

The U.S. Department of Treasury has announced its approval of $801.4 million in SSBCI funding for eleven U.S. states and territories: Arkansas, Delaware, Guam, Kentucky, New Jersey, Puerto Rico, Rhode Island, Tennessee, the U.S. Virgin Islands, Wisconsin, and Wyoming. The addition of these states and territories means 46 states and three territories have been approved for State Small Business Credit Initiative (SSBCI) funding. Treasury has now approved over $7 billion in SSBCI funding. This news comes alongside the upcoming two-year anniversary of the passage of the American Rescue Plan Act on March 11, 2021.

Arkansas

Arkansas has been approved for up to $81.6 million to operate seven programs: a capital access program, two loan participation programs, two loan guarantee programs and two equity/venture capital programs. The state allocated $15 million to the loan guarantee program and $7.5 million to the loan participation program, with a focus on reaching underserved businesses. The equity/venture capital programs have been allocated a combined $46 million to invest in high growth companies across the state.

Delaware

Delaware has been approved for $60.9 million to operate four programs. The Delaware Accelerator and Seed Capital Program, allocated $7.5 million, will support three accelerator programs, alongside supporting idea-stage startups. The Delaware Early-Stage VC Program, allocated $22.5 million, will support the formation of new VC funds throughout the state, and another investment program has been allocated $3.4 million. A loan participation program is being allocated $27.5 million and will offer up to 50% participation in small business loans for equipment and working capital. 

Guam

Guam has been approved for $58.6 million to operate three programs: a loan guarantee program, a collateral support program and an equity/venture capital program. Over $36 million has been allocated to the loan guarantee program, which will provide partial guarantees to lenders with necessary security. Further, the funds target underserved communities by using a “multi-pronged” marketing and partnership strategy. The collateral support program will be allocated $12 million to provide cash collateral to support loans. The final $10 million will fund the equity/venture capital program to provide seed-, early- and growth-stage investments in startups. 

Kentucky

Kentucky has been approved for $117.1 million to operate a loan participation program, a collateral support program and two equity/VC programs. Among other things, the funding will be used to expand access to capital, focusing on seed and pre-seed investments and expand capital access for underserved communities. Monique Kuykendoll Quarterman, the executive director of KY innovations, said the state will be “heavily investing into our venture capital community.”

New Jersey 

New Jersey has not been officially announced by Treasury, but the state’s governor has announced the state has received Treasury approval for over $255 million in SSBCI funding, which it is using to launch six programs that will offer financial and technical assistance to small, micro, and early-stage businesses in the innovation sector. A direct investment matching fund, the Life Science Investment program, will be allocated $60 million to support early-stage life science businesses. The Socially- and Economically-Disadvantaged Individuals (SEDI) Seed Fund will be allocated $20 million, to create one or more venture funds that will support SEDI-owned seed and early-stage startups. An Angel Match Program is being allocated $20 million to match direct investment in early-stage, product-based technology companies on a one-to-one basis up to $500,000. A loan participation program, the Clean Energy Business Financing Program, will be allocated $80 million to assist eligible businesses seeking to finance qualifying clean energy projects. New Jersey will also allocate $50 million to a co-investment fund, the Blended Capital Fund, which will allow more lending through supporting the purchase of eligible loans from Community Development Financial Institutions (CDFIs). Finally, $25 million will be allocated to the Recovery Loan Loss Reserve to provide CDFIs and Minority Depository Institutions (MDIs) with a loan guarantee of 50 percent for all eligible loans.

Puerto Rico

The commonwealth of Puerto Rico has been approved for $109.3 million to operate two programs. One is a loan participation program, which will be allocated $21.8 million, to participate in commercial loans and target specific sectors to catalyze economic development. The second program, a collateral support program, will be allocated $87.4 million to provide collateralize guarantees to lenders, allowing for broader participation by financial institutions operating in Puerto Rico.   

Rhode Island

Rhode Island is set to receive $61.7 million in federal funding through the State Small Business Credit Initiative (SSBCI). The state will operate three programs: a capital access program, which will be allocated $3 million; a loan participation program, which will be allocated $27 million; and a venture capital program, which will be allocated $31.5 million. The venture capital program will target early-stage, high-growth businesses to expand capital to underserved businesses. The Rhode Island Commerce Corporation has published a request for proposal (RFP) to identify partners and launch SSBCI-funded programs later in 2023.

Tennessee

Tennessee has been approved for $116.9 million to operate four programs. The Tennessee Department of Economic and Community Development (TNECD) will be allocated $46.9 million to operate Fund Tennessee, a debt program that will participate in CDFI and MDI loan transactions with a focus on underserved and rural communities. The remaining $70 million will be allocated to an equity program that will focus on early-stage startup investments, with a fund-of-funds strategy investing in emerging venture capital fund managers. 

U.S. Virgin Islands

The U.S. Virgin Islands has been approved to receive $57.5 million to operate a collateral support program, a loan participation program and two loan guarantee programs. 

Wisconsin

Businesses in Wisconsin will receive $79.1 million of SSBCI funding to operate seven programs: a capital access program, a collateral support program, a debt/equity hybrid program, two loan participation programs and two equity/venture capital programs. A Wisconsin Investment Fund will be allocated $50 million to partner with venture capital funds investing private capital in Wisconsin-based start-ups. Another $8 million will be allocated to expanding the Wisconsin Economic Development Corporation’s (WEDC) Technology Development Loan program which will improve flexible financing terms for small businesses. The Wisconsin Housing and Economic Development Authority (WHEDA) will receive $15 million to provide credit support to small businesses that receive microloans from CDFIs, improving access to capital for small businesses and expanding loan participation. Finally, WEDC’s Capital Catalyst program will be allocated $6 million to provide matching funds to non-profit organizations operating small-business loan programs. 

Wyoming

Wyoming was approved for $58.4 million to operate two equity/VC programs. The first program, a funds program, has been allocated $23.4 million to provide limited partnership investments throughout the state, specifically to seed/early-seed VC funds. The second program, a direct program, will be allocated the remaining $35 million to provide equity co-investments in growth-stage tech companies throughout the state. The programs aim to increase access to venture capital investments for entrepreneurs across the state.