State Small Business Credit Initiative funds awarded to Tennessee to support local small business financing and investment programs
Washington — The U.S. Department of the Treasury announced the approval of four additional state plans for up to $353.4M in funding under the State Small Business Credit Initiative (SSBCI). Treasury has now announced the approval of state and territory plans corresponding to over $7B in SSBCI funding to support small business and entrepreneurship and expand access to capital.
“This is an historic investment in entrepreneurship, small business growth and innovation through the American Rescue Plan (ARP) that will help reduce barriers to capital access for traditionally underserved communities,” said Secretary of the Treasury Janet L. Yellen. “These SSBCI funds will promote equitable economic growth across the country.”
The ARP reauthorized and expanded SSBCI, which was originally established in 2010 and was highly successful in increasing access to capital for small businesses and entrepreneurs. The new SSBCI builds on this successful model by providing nearly $10B to states, the District of Columbia, territories and Tribal governments to increase access to capital and promote entrepreneurship, especially in traditionally underserved communities as they emerge from the pandemic.
This includes $2.5B in funding and incentives to support underserved businesses. SSBCI funding is expected to catalyze up to $10 of private investment for every $1 of SSBCI capital funding, amplifying the effects of this funding and providing small-business owners with the resources they need to sustainably grow and thrive.
In Jan., the census bureau released data which showed that over the last two years Americans have applied to start 10.5 million new businesses, making 2021 and 2022 the strongest two years on record for new business applications. The investments being made through SSBCI are a key part of a strategy to keep this small business boom going by expanding access to capital and by providing entrepreneurs the resources they need to succeed.
The following description highlights the key programs that Treasury has approved for TN:
- Tennessee is approved for up to $116.9M that will operate four programs, a loan participation program and three venture capital programs. Tennessee allocated $46.9M for a debt program that will participate in loan transactions with Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) that serve rural to urban areas of the state, including underserved communities. Tennessee, in partnership with LaunchTN, allocated $70M for the equity program focused on direct investments in early-stage startups, along with a fund-of-funds strategy investing in emerging venture capital fund managers.
