More relief for businesses has arrived as high inflation, supply chain issues and the threat of a recession pile on other issues posed by the pandemic.
The US Treasury is distributing the first round of funds from the reauthorized State Small Business Credit Initiative (SSBCI) to five states: Hawaii, Kansas, Maryland, Michigan and West Virginia. The SSBCI is a small business relief program that has been around for just over a decade, but was revived in March 2021 after President Joe Biden signed the US $1.9 trillion bailout into law. of dollars.
According to a report by The Wall Street Journal. The federal stimulus package allocated $10 billion to the SSBCI, though the Treasury says the program could provide up to $100 billion in total lending authority. The program plans to generate $10 of private investment for every dollar of federal funding.
SSBCI funds are not distributed directly to companies but rather to lenders. State governments previously submitted their individual plans to the Treasury that detailed how they would allocate the funds to small businesses, which can be dispersed across an array of programs offering venture capital, access to capital, collateral support, participation loan and loan guarantees.
Maryland Governor Larry Hogan said in a statement that the Old Line state was the first in the nation to submit its SSBCI deployment plan to the Treasury, explaining why it was one of the first states to be approved. . Maryland will begin rolling out the funds starting this summer. The state of Michigan could see the first round of SSBCI funding in the next 30 to 60 days, according to a release celebrating the award.
The State of Hawaii, for its part, plans to establish new loan participation and credit enhancement programs and distribute funds to underserved entrepreneurs in an effort to expand Hawaii’s economy. and to make it less dependent on tourism. Meanwhile, West Virginia will use its funds to increase access to venture capital (the state has no resident venture capitalists, according to the Treasury.)
Qualifying small businesses and startups – generally defined as businesses with 500 or fewer employees – can seek loans or investments as they normally would through their bank, community lender or equity investor. shares.