Small businesses are still recovering from the pandemic and require financial resources now more than ever. To provide support, the State Small Business Credit Initiative (SSBCI) is allocating $10 billion in funding across all 50 states and territories in the United States. Applications for Alaska businesses are open, and it is important for business owners to act quickly.
The State of Alaska has been allotted a certain amount of SSBCI funding, which will be distributed through various programs. The Alaska SSBCI funds will be deployed by the Alaska SBDC through a $32 million loan guarantee program, a $15.9 million loan participation program, a $10 million equity investment program and a $2 million loan collateral program. These funds will be deployed over the next 10 years to help Alaska’s small businesses grow and thrive.
A main priority of the state is to increase available capital for minority groups and other marginalized business owners.
🚀 Do you need help applying for funding for your small business in Alaska? We can help you with 1 on 1 service. Book a call or sign up now.
What kinds of funding can Alaska businesses receive?
Each state has its own plan for distributing funding. In Alaska, funding is given through a variety of programs, all of which fall into two categories: loan programs and venture/equity programs.
Here is what you will see:
- Venture Capital/Equity Funds: The $10 million Alaska Equity Fund provides financing by purchasing an ownership interest or providing equity-like loans to enterprises that typically do not participate in debt financing markets due to their business stage and structure.
- Alaska Loan Participation Program: The program will provide both side-by-side loans originated by the lenders and loan purchase options to support loan participation for qualifying small businesses.
- Alaska Loan Guarantee Program: The program that will provide guarantees to lenders to support loans to qualifying small businesses on a case by case basis.
- Alaska Collateral Support Program: This program will provide a cash deposit as collateral for a business loan or credit facility when the business cannot meet the lender’s collateral requirements, providing a maximum of 25% of the loan amount in collateral, with a maximum loan size of $5 million.
Which SSBCI programs are open now in Alaska?
The Alaska Equity Fund, Alaska Loan Participation Program, the Alaska Loan Guarantee Program and the Alaska Collateral Support Program are all currently open for applications.
📍 Do you need help determining which program is the best fit for your Alaska business? We can help you with 1 on 1 service. Book a call or sign up now.
What businesses are eligible for SSBCI funding?
To be eligible for the program, businesses must have fewer than 750 employees, be operating in Alaska, and the loan or investment round must be $20 million or less. Additionally, business owners must not be registered sex offenders.
What can the funding be spent on?
- Startup Costs
- Working Capital
- Franchise Fees
- Equipment Purchase
- Inventory
- More
What CAN’T the funding be spent on?
- Cannabis-related businesses
- Passive real estate investments
- Gaming
- Purchasing an owner's share in the business or reimbursement of owner contributions
- Paying off existing loans (with some limited exceptions)
How to apply for SSBCI funding in Alaska:
While Alaska does not currently list their approved lenders, that list is expected to be available towards the end of January. No matter which funding source you connect with, some parts of the process will look the same no matter what – like your documentation.
Doing your due diligence to document your business and your application is the key to SSBCI funding success. Be prepared to provide:
- Business plan
- Intake surveys
- Past business tax returns
- Past personal tax returns
- Business debt schedule
📍 If you need assistance with your documentation, we can help. Book a call or sign up now.
Common challenges in applying for SSBCI funding:
It's important to remember that the funding amounts for these programs may change over time based on usage and feedback from businesses and private sector lenders/investors. Additionally, SSBCI funds cannot be used in connection with other federal funding programs.
Don't miss out on this opportunity to get the funding you need for your small business in Alaska. Apply now and book a call for 1 on 1 service to get the help you need.