Treasury Approves Four Additional State Plans to Help Underserved Entrepreneurs and Small Business Growth Through the State’s Small Business Lending Initiative

Colorado, Oregon, New York and Montana have been approved for $750 million to support small business investments

WASHINGTON — Today, the U.S. Department of the Treasury announced an additional group of four state plans approved under the State Small Business Credit Initiative (SSBCI) for up to $750 million in funds to expand access to capital for small businesses. The Treasury Department has announced more than $2.25 billion in funding approvals to promote small business growth through the SSBCI. The US bailout reauthorized and expanded SSBCI, which was originally established in 2010 and has been very successful in increasing access to capital for traditionally underserved small businesses and entrepreneurs. The new SSBCI builds on this successful model by providing nearly $10 billion to states, the District of Columbia, territories and tribal governments to increase access to capital and foster entrepreneurship, especially in traditionally underserved communities as they emerge from the pandemic. SSBCI funding is expected to catalyze up to $10 of private investment for every $1 of SSBCI equity funding, amplifying the impact of that funding and providing small business owners with the resources they need to grow sustainably and thrive. State governments have submitted plans to the Treasury on how they will use SSBCI allocations to provide financing to small businesses, including through venture capital programs, loan participation programs, loan guarantee programs, collateral support programs and for access to capital.

“This is a historic investment in entrepreneurship, small business growth and innovation through the America’s Rescue Plan that will help reduce barriers to access to capital for traditionally underserved communities,” said Treasury Secretary Janet L. Yellen. “I am excited to see how SSBCI’s funds will promote equitable economic growth across the country.”

A White House report released in June found that more Americans are starting new businesses than ever before. In 2021, Americans applied to start 5.4 million new businesses – 20% more than any other year on record. It also found that small businesses are creating more jobs than ever before, with businesses with fewer than 50 workers adding 1.9 million jobs in the first three quarters of 2021 – the highest rate of job creation in the small business ever registered in a year. Investments made through SSBCI are a key part of the Biden administration’s strategy to keep small businesses booming by expanding access to capital and giving entrepreneurs the resources they need to succeed. The work done by Treasury through the implementation process to ensure that SSBCI funds reach traditionally underserved small businesses and entrepreneurs will also be critical to ensuring that the small business boom not only continues, but and continues to uplift communities disproportionately affected by the pandemic. Treasury intends to continue approving state plans on an ongoing basis.

These SSBCI program recipients plan to target key industries and small businesses that need access to capital, including support for underserved businesses seeking contracting opportunities, which is consistent with the focus of the Biden-Harris administration on increasing equity capital through federal procurement as a result of the passage of the historic Bipartisan Infrastructure Act.

The following descriptions highlight some of the key programs approved by the Treasury Department for these states:

  • Colorado, approved for up to $104.7 million, will operate three programs, including a venture capital program for which nearly $60 million has been allocated. The program expects to invest in two venture capital funds per year for three years to build a diverse seed portfolio of small businesses in need of capital. Colorado also set aside $35 million for an existing Cash Collateral Assistance Program, which allows small businesses and nonprofits to secure credit by pledging a cash deposit as collateral. In addition, Colorado has set aside $10 million for a loan program designed to help Main Street businesses recover from the pandemic.
  • Montana, approved for up to $61.3 million, will operate a loan participation program modeled after a successful program in the previous iteration of SSBCI. This new program is designed to significantly increase the number of eligible CDFIs and not-for-profit local economic development agencies with revolving loan funds (RLFs) that can participate in the program to obtain a much broader reach to target markets with insufficient service. In addition, this program gives rural and Native American entrepreneurs a greater opportunity to create new businesses and expand existing small businesses – creating jobs and economic opportunity in rural Montana and Indian Country counties.
  • New York, approved for up to $501.5 million, will operate multiple programs, including a capital access program, loan guarantee programs, loan participation programs and venture capital programs. For example, New York has committed over $154 million to a program that provides capital support to small businesses by investing through private venture capital funds and accelerator funds. This program will provide capital support to funds with diverse and emerging fund managers and teams. In addition, New York has allocated funds for two programs designed to help small and underserved businesses compete for government contracts, which may include projects funded by the bipartisan Infrastructure Act. As part of that effort, New York will expand an existing program that saw a significant portion of its support for potential contractors going to minority- and women-owned businesses.
  • Oregon, approved for up to $83.5 million, will operate five programs, including two venture capital programs for which the state has committed $30 million. Venture capital programs are designed to invest in funds that need additional startup and scaling capital and make co-investments in companies together with private investors, matching the structure and terms of the lead investor. In its programs, the Oregon Plan aims to counter systemic barriers to economic opportunity by providing access to capital in persistently underserved low- and moderate-income areas and rural communities. Oregon expects these programs to be self-sustaining, providing vital support to Oregon small businesses now and in the long term.

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