Treasury releases 2022-23 SSBCI Annual Report

The United States Department of the Treasury’s (Treasury) new 2022-2023 State Small Business Credit Initiative (SSBCI) 2.0 Annual Report highlights the nearly $10 billion program to enhance access to capital for small businesses, particularly those in underserved communities. Data from the participating jurisdiction’s first 18 months—from August 5, 2022 through December 31, 2023—reveals approximately $750 million expended SSBCI dollars, resulting in $3.1 billion in overall new financing, including $2.6 billion in private investments, and 46,200 jobs reported expected to be created or retained (20,600 created and 25,600 retained). These funds have supported nearly 3,900 loans or investments, with 75% of transactions directed toward underserved businesses, including 40% for minority-owned and 31% for women-owned or controlled companies.

Of these transactions, the majority were part of lending programs. Loan participation programs had the largest number of total transactions at 1,295, or 33% of the total, in 2022-2023, followed by loan guarantee programs (1,032) and capital access programs (749). Overall, lending programs made up the lion’s share of total transactions, 84%, while investing programs make up the remaining 16%.

However, despite their relatively small proportion of the transactions, investing programs make up nearly 42% of overall transactions in terms of dollar amounts. These programs also account for 21% of expected jobs retained and 35% of expected jobs created.

SSTI has compiled data from Treasury’s annual report on these outcomes by program type in Figure 1. Clicking on the dropdown beneath the title will allow for selecting one of five outcome metrics, for which the visual will automatically rescale. Clicking on either “Lending Programs” or “Investing Programs” will reveal a breakdown of the program types within each, all scaled by the selected metric. This layout allows for an easy, visual way to discern the relative differences between program outcomes by type.

Figure 1: SSBCI 2.0 outcomes by program type, 2022-2023.

While lending programs have resulted in a larger amount of total new financing, as seen in Figure 1, the average new financing per transaction (C/A) and median new financing are substantially lower than that of investing programs. Investing programs resulted in average new financing per transaction (C/A) nearly four times that of lending programs ($546,900 vs, $2,109,500) and over 10 times the median ($87,700 vs $880,000).

A breakdown of these trends by program type is shown in Figure 2.

Figure 2: Average new financing per transaction (C/A) and median new financing by program type, 2022-2023.

The new financing leveraged varies greatly by program type, with Capital Access Programs garnering $24.10 in new financing for each expended SSBCI dollar ($2.80 in new financing for Other Credit Programs) and Equity/Venture Capital Programs attracting $5.10 in new financing for each expended SSBCI dollar.

SSBCI 2.0 and Venture Capital

Of the $8.9 billion in approved SSBCI programs, SSBCI jurisdictions allocated $3.1 billion to venture capital programs. A total of 60 VC funds have received an SSBCI capital commitment, the majority (39) of which are owned and/or managed by diverse or underserved fund managers or have an investment strategy including a focus on supporting companies with underserved founders or leaders.

In 2022-2023, these SSBCI-supported programs expended $211 million, supporting 609 total small companies with an average investment size of $1.8 million. These VC programs have leveraged $1.2 billion of private capital.

Direct VC programs were present in more jurisdictions and represented more expended funds and private capital leveraged at the time of investment than Funds VC programs as of the end of 2023. A total of 28 jurisdictions were home to 38 programs (14 Funds VC programs were present in 14 jurisdictions), expending $192.3 million in SSBCI allocated funds, 20% ($38.7 million) of which was expended for underserved businesses. Funds VC programs, on the other hand, expended a much lower $19.4 million in SSBCI allocated funds and maintained a slightly lower percentage for underserved businesses at 17%.

This difference in expenditures can likely be attributed to the nature of a direct versus funds program; through Direct VC programs, jurisdictions make direct investments in companies, while through Funds VC programs, jurisdictions commit capital to VC funds, which then make investments into companies.

The top industries by SSBCI-supported VC transactions were professional, scientific, and technical services, manufacturing, and information.

By investment stage, early-stage investments were the most common, making up 37% of deals by these programs as of the end of 2023. Seed closely followed at 36%, while pre-seed represented 19% of the total deal count, later stage 8%, and growth equity just 1%. This data can be seen in Figure 3, below.

Figure 3: Investment stage spread of SSBCI 2.0 Equity/Venture Capital investments

To read more about the SSBCI 2.0 program, including additional metrics like detailed demographics, state and industry breakdowns, refer to Treasury’s full report.

This page was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.