Earlier this year, Governor Larry Hogan announced that Maryland is providing up to $198 million in small business aid funded by the federal state’s Small Business Lending Initiative, further reaffirming that Maryland remains “open for business” as part of its economic recovery from the COVID-19 pandemic.
Created by Congress in 2010 to provide loans and investments to underserved small businesses, the State Small Business Lending Initiative received a $10 billion allocation as part of the Saving America Act of 2021. Recognizing the tremendous opportunity for small businesses and entrepreneurs in the state, Maryland was the first state in the nation to submit its implementation plan to the U.S. Treasury Department and among the first five states to be approved.
Under the Maryland State Small Business Lending Initiative plan, nine existing state business loan and investment programs were expanded and improved. The programs are administered by three state agencies: the Maryland Department of Housing and Community Development, the Maryland Department of Commerce, and the Maryland Technology Development Corporation.
The nine programs support businesses with limited growth opportunities due to the pandemic or historic loss of investment. Maryland’s state small business lending initiatives target communities and areas with high concentrations of small, micro, and socially and economically disadvantaged (SEDI) businesses to support ongoing state investments in underserved communities. Expanding these proven and successful programs ensures rapid and efficient deployment of these new resources to eligible businesses and entrepreneurs. To complement these nine programs, the State Small Business Lending Initiative also provides eligible businesses with technical assistance, including legal, accounting and financial advisory services.
The Maryland Department of Housing and Community Development administers its $103 million in funding from the state’s Small Business Lending Initiative through three Neighborhood BusinessWorks initiatives. The Neighborhood BusinessWorks program provided more than $70 million during the Hogan administration to fund new and expanding small businesses that support revitalization within Maryland’s designated Opportunity Zones, Priority Funding Areas, Sustainable Communities and Institutional Investment Zones to finance community development. These new federal resources have greatly expanded capacity for Neighborhood BusinessWorks’ traditional loan participation program, which assists eligible businesses with working capital and real estate acquisitions. Neighborhood BusinessWorks also launched two new program initiatives. The Neighborhood BusinessWorks Loan to Lender initiative directly supports the revitalization and investment efforts of community development finance institutions by leveraging their unique knowledge and community partnerships by providing them with funds to re-lend to local small businesses. The Neighborhood BusinessWorks Venture Loans initiative supports strategic businesses with strong economic impact and potential job growth.
The Maryland Department of Commerce is allocating its $45 million state small business lending initiative through two programs of the Maryland Small Business Development Financing Authority, a loan program and a capital investment program. Established in 1978 to promote the viability and growth of socially and economically disadvantaged businesses run by individuals, the resources of the Maryland Small Business Development Financing Authority are made available to small businesses that cannot adequately obtain business financing on reasonable terms. Specifically, the program has become an established resource for supporting the growth of minority- and women-owned businesses. The Maryland Small Business Development Financing Authority’s outreach and lending is supported by a network cultivated and grown over the years to include government agencies, local economic development organizations, banks and private equity firms, as well as numerous business associations, chambers of commerce and local professionals.
The Maryland Technology Development Corporation will direct $50 million in funds from the State’s Small Business Lending Initiative into four existing programs targeting technology-based businesses and entrepreneurs in Maryland. Three programs – the Venture Capital Fund, the Venture Capital Limited Liability Company Capital Program and the Seeds Funds Equity Program – are primarily focused on venture capital and startup financing. The fourth, the Social Impact Fund, provides investment and support to entrepreneurs who demonstrate economic or social disadvantage. Through these four programs, TEDCO will continue to strengthen its relationships with top-tier technology companies, entrepreneurs and investors in the state, while collaborating with universities, regional business accelerators and incubators and other organizations.
Supported by the expertise and experience of these state agencies, the Maryland State Small Business Lending Initiatives provide a range of financing and technical assistance opportunities that can support many new and growing businesses in Maryland. To learn more or apply for assistance, visit open.maryland.gov/ssbci.
This article is featured in the 2022 edition of The Daily Record’s Small, Minority and Women-Owned Business Empowerment Resource Guide, published on September 23. Published in conjunction with the Governor’s Office of Small, Minority, and Women’s Business, Expanding Opportunities explores diversity, entrepreneurship, and innovation in Maryland’s small business community. Read more from Expanding Opportunities or read the digital edition.