There is currently $10 billion being distributed to all 50 states and territories in the United States for small businesses. That means that your small business might be able to take advantage of this program shortly. But before you jump in, it's important to know the ins and outs of the program.
For an initial overview, you can watch our CEO Ryder's video walking through the SSBCI. Full list of every state's SSBCI status at the end.
What is the SSBCI program?
The original State Small Business Credit Initiative (SSBCI) program was passed shortly after the Great Recession to help small businesses recover. At the time, it was valued at $1.5 billion.
A year ago, President Biden signed The American Rescue Plan Act, which reauthorized and funded the SSBCI. This time, the SSBCI program is worth $10 billion in total, and is being distributed to every single state and territory in the United States. Again, the goal is to help small businesses that are struggling due to the pandemic with multiple forms of funding.
Who is being helped by the SSBCI program?
One of the biggest problems in moments like this, and in general, is the structural inequality in funding for businesses. The goal of the SSBCI is to help address these inequities.
The main goal is to help businesses owned by individuals that face barriers to accessing loans and other forms of funding. This includes those that are subject to racial and ethnic prejudice or cultural bias within the U.S.
The SSBCI will also help support small businesses that are in low income and high-poverty areas, including minority-owned businesses. On top of that, it will provide over $600 million to Tribes in the U.S. and $500 million to businesses with fewer than 10 employees.
In addition, the government has stated that its goal with this program is specifically to help increase job opportunities.
How is the SSBCI funding made available?
Although the money is coming from the federal government, the funding is provided on a state by state basis and distributed through the states themselves. Each state is approved and finalized on a rolling basis, so it's important to stay up to date on your state's process.
For a constantly updated list of approved states and details, you can visit our blog post for the latest info.
You can also be notified when your state is added by signing up here.
Who is eligible for SSBCI funding?
This is not a competitive process. Rather, you simply need to meet the requirements and provide your application on time in order to receive funding.
Each state has its own funding requirements and works with a variety of lenders. To learn more, you can visit your state's information, but if you would also like help with this process, Skip provides 1 on 1 support for this with our staff.
When do you need to apply?
This is very important: applications are accepted on a rolling basis.
In other words, funding is given on a first come, first serve basis. So the sooner you apply once your state's funding is available, the better.
How can the funding be used?
A number of options have been spelled out, including:
- Working capital
- Receivables
- Equipment and inventory
- Start-up costs
- Term loan financing
- Lines of credit
- Trade cycle financing
- Purchase or construction renovations of non-passive real estate
Remember that each state has its own programs, so it's important to check your specific state's terms.
What funding options are available?
There are five forms of funding available in total, with two forms as the main focus. Each state provides its own unique form of funding based on these five, so it's important to also research your own state's information.
Venture Capital Programs: These programs are set up to address inequities in venture capital funding for startups. They provide venture capital to underserved startups across geography and to diverse founders.
Loan Participation Programs: In this case, states buy an interest in the loans made by lenders or lend directly alongside private lenders. This allows them to provide direct lending to finance small businesses in partnership with lending companies.
Loan Guarantee Programs: The goal here is to make it easier for small businesses that may otherwise have trouble securing loans or who would find them too expensive, to get the loans they need. This is done by the states using SSBCI funds to provide an assurance to lenders that they will be partially repaid in the event of default.
Collateral Support Programs: This is a similar program, which sets aside funds as collateral for new loans, which will allow small businesses to borrow more easily.
Capital Access Programs (CAPs): CAPs provide credit enhancement for small-business loans by pooling contributions for insurance in the form of a loan loss reserve fund. This would allow cover in case a loan defaults, again making it easier for small businesses to secure loans.
Does my state have SSBCI funding yet?
We've listed the current SSBCI funding situation for every single state here.
How can you learn more?
There are a number of resources you can use.
The government's SSBCI website offer's continuous updates, although it can be hard to dig through. We also suggest staying up to date on your state's government website as well.
Add your email to get alerts for when your state has available SSBCI funding.
Visit our up-to-date blog post with state by state SSBCI funding information.
Get one-on-one support from our team if you need more personalized help.
