The U.S. Treasury on Friday announced plans to roll out its third round of funds from the reauthorized State Small Business Credit Initiative (SSBCI) to Colorado, Montana, New York and Oregon. Altogether, the four additional states were approved to receive up to $751 million in relief.
The SSBCI is a small-business aid program that’s been around since 2010, but was replenished in March 2021 thanks to the $1.9 trillion American Rescue Plan Act that President Joe Biden signed into law.
The $10 billion funding program aims to broaden access to capital for underserved communities. SSBCI funds are not distributed directly to companies, but instead go to lenders. Eligible small businesses and startups–typically defined as companies with 500 or fewer workers–can seek out loans or investments as they normally would through their bank, community lender, or equity investor.
The news follows an earlier release of funds in May to five states: Hawaii, Kansas, Maryland, Michigan, and West Virginia. The five states were approved for up to approximately $639 million in relief.
In July, the Treasury approved another $1.5 billion in funding after green-lighting nine state plans from Arizona, Connecticut, Indiana, Maine, New Hampshire, Pennsylvania, South Carolina, South Dakota, and Vermont. The agency has announced more than $2.25 billion in funding approvals to date, or nearly a fourth of the $10 billion program.
The Treasury estimates that the program could generate $10 in private investment for each dollar in federal funding–bring the grand tally for states to $100 billion in total lending authority.
There’s a menu of resources available to businesses through the SSBCI, which include venture capital, capital access, collateral support, loan participation, and loan guarantees programs. State governments previously submitted their individual plans to Treasury describing how they’d allocate the funds to small businesses.
Montana, for its part, says it will operate a loan participation program with its funding and plans to expand opportunity for the state’s rural and Native American entrepreneurs. Colorado expects to oversee three different small business-focused programs, and specifically set aside $10 million of its SSBCI allocation to help businesses recover from the pandemic. Colorado Governor Jared Polis praised the announcement in a Friday news release, saying that the funding will help support more than 11,000 jobs in the Centennial State.
Echoing that praise was U.S. Secretary of the Treasury Janet Yellen: “this is an historic investment in entrepreneurship, small business growth, and innovation through the American Rescue Plan that will help reduce barriers to capital access for traditionally underserved communities including those in rural areas,” Yellen said in a Friday statement.
The roadmap for future releases and the amount of relief is unclear. Details are expected to unfold, as funding gets approved.