South Carolina’s venture capital and small business lending programs will soon be able to take advantage of more than $101 million in American Rescue Plan Act funding earmarked for the state, according to Senator Tim’s deputy legislative assistant. Scott, Luis Reyès.
The capital is a portion of $10 billion in State Small Business Credit Initiative funding provided to states, the District of Columbia, U.S. territories, and tribal governments when ARPA was signed into law on 11 March 2021.
The SSBCI program began in 2010 and ran until 2017, when the Council of Development Finance Agencies called it “one of the most successful federal programs to expand funding mechanisms.” access to capital at the time”. It has deployed $1.4 billion in funding to more than 16,900 small businesses. After a four-year hiatus, ARPA has revived the program.
According to Reyes, the revitalized version of the program, like its predecessor, will target venture capital, capital access, loan participation and loan guarantee programs, as well as collateral support initiatives run by governments, financial institutions and community or economic development organizations.
Loan Participation Programs allow public entities to buy equity in a loan or lend to small businesses alongside private entities. Loan guarantee programs allow public entities to use SSBCI funding to support lenders with at least half of what is owed to them if a borrower defaults, according to the US Treasury Department. Capital Access Programs differ from other capital offerings by supplementing a loan loss reserve fund for the lender and borrower with SSBCI funds.
States submitted application forms for the nominee programs to the US Treasury Department on February 11, and the US Treasury extended the application deadline to May 11 for tribal governments such as the Catawba Nation of Rock Hill.
All jurisdictions except tribal governments must submit requests for technical assistance to the Treasury Department by June 30, but, at the time of publication, the guidelines for the request had not yet been posted on the US Treasury website – still the best source of information for the SSBCI, according to Reyes.
“They provide a lot of helpful resources that break this down,” he told credit union and community development representatives in attendance at Ten at the Top’s Upstate Entrepreneur Ecosystem meeting on March 16.
According to the site, approximately $56 million in SSBCI funding will go to South Carolina’s main fund, $4 million to micro-enterprise capital, and $26 million to private enterprise capital owned by socially or economically disadvantaged people. referred to as “SEDI companies”. by the Treasury Department. The state will have initial access to $14 million.
As of March 3, the Treasury Department began collecting demographic data from participating jurisdictions on the race, ethnicity, sexual orientation and gender identity of small business owners to measure the impact of the SEDI business program.
“The design of the State Small Business Credit Initiative program is intended to help address the unfortunate reality that underserved communities have historically faced greater barriers to accessing capital than others, preventing them from pursuing their business ideas and ambitions,” said Assistant US Treasury Secretary Wally Adeyemo. A press release. “This new report will provide Treasury with the information we need to assess the impact of this program in communities across the country and work to provide these communities with the capital they need to achieve their entrepreneurial visions.”
Contact Molly Hulsey at 864-720-1223.